**Updated on 4-12-2018*

MACRA Final Rule 2018 was published back in Nov 2017, but the Bipartisan Budget Act of 2018 that was signed on Feb 9th, 2018 changed certain provisions related to the Cost Category for MIPS 2018 performance year. Cost performance category would still have a 10% weight in calculation of the final MIPS score in 2018, but there are some changes related to performance improvement in the Cost category.

**Here are the 8 things you need to know to prepare for the Cost category in 2018:**

## 1. OLD is the new NEW

Cost was finalized to have a 10% weight for the 2018 performance year in the just released Quality Payment Program final rule. However, CMS had proposed to reduce Cost to 0% in the 2018 proposal which was submitted for public comment earlier this year. After reviewing the comments, they decided to NOT finalize the proposed change in this final rule. As the Cost category will need to have 30% weight by the 2019 performance year *(*this may change pursuant to the Bipartisan Budget Act of 2018 (HR 1892))*, CMS believes that keeping it at 10% for 2018 would allow for a smoother transition. **The Cost performance category reporting period will be for the full year in 2018. **[Quick overview of Cost Category in 2018]

## 2. Cost category score will be calculated from the Medicare administrative claims

Therefore, there is no additional data submission required for performance year 2018. It’s important to note that although CMS will be calculating the Cost score for 2017 even though the weight of the Cost performance category for 2017 is 0%. However, to get an estimate of how you are doing on the two Cost measures applicable in MIPS 2018, pay attention to the **2017 Feedback Report **that will be available in summer of 2018.

## 3. Episode based measures will be included for 2017 performance year

Cost performance feedback for 2017 will be based on 12 measures – the 10 episode-based measures, the MSPB, and the total per capita cost for all attributed beneficiaries. However, the Cost performance category score for 2018 will be calculated based on just two measures:

- Medicare Spending Per Beneficiary (MSPB)
- Total Per Capita Cost for all attributed beneficiaries

The 10 episode-based measures are being evaluated and thus will not be included in 2018.

## 4. Improvement scoring will not apply to Cost category in 2018

***Update:** According to Bipartisan Budget Act of 2018 (HR 1892) released on **Feb 9, 2018, **MIPS transition years are extended till 2021 (3 additional years). According to this update, the **Cost Improvement Scoring will not apply to 2018 MIPS performance year.** additionally, weight for the Cost performance category may stay at 10% for a few more years.

## 5. Cost performance category will have its own benchmarks

Similar to the calculation of Quality performance category score, the Cost score would be calculated on a decile system by comparing performance against benchmarks. However, Cost score calculation is a little different than the Quality score calculation:

- The Cost benchmarks will be based on the performance for the same year unlike the Quality benchmarks that are based on prior years’ performance
- There is no minimum number of measures required. The score will be calculated when the organization meets the case minimum requirement for the two measures, which are:

- Medicare Spending Per Beneficiary (MSPB) - 35

- Total Per Capita Cost for all attributed beneficiaries - 20

Cohort based (e.g.specialty specific) benchmarks are being considered by CMS, but might not be ready for year 2 of MIPS.

## 6. Only Two Cost Measures Applicable in 2018

Here is an overview of the two measures that will be included for 2018. In the follow up blogs, we will drill down into further details of each of these measures.

**i. Medicare Spending Per Beneficiary (MSPB)**** **

- The numerator for a TIN’s specialty-adjusted MSPB Measure is the TIN’s average MSPB amount, which is defined as the sum of standardized, risk-adjusted spending across all of a TIN’s eligible episodes divided by the number of episodes for that TIN. This ratio is multiplied by the national average standardized episode cost. An MSPB episode includes all Medicare Part A and Part B claims with a start date falling between 3 days prior to an Inpatient Prospective Payment System (IPPS) hospital admission (also known as the “index admission” for the episode) and 30 days after hospital discharge.

- Has been used in the Value Modifier since 2016

**ii. Total Per-Capita Cost for All Attributed Beneficiaries**

- The outcome for this measure is the sum of Medicare Part A and Part B costs for each beneficiary. Costs are payment standardized, annualized, risk adjusted, and specialty adjusted.

- Has been used in Value Modifier since the 2015 payment adjustment period

- In the 2017 Quality Payment Program final rule, CMS added the transitional care management (CPT codes 99495 and 99496) codes and a chronic care management code (CPT code 99490) to the list of primary care services that had been used to determine attribution for the total per capita cost measure. In the CY 2017 Physician Fee Schedule, CMS changed the payment status for two existing CPT codes (CPT codes 99487 and 99489) that could be used to describe care management from B (bundled) to A (active) thus allowing these services to be paid under the Physician Fee Schedule. CMS considered the services described by these codes substantially similar to those described by the chronic care management. Therefore, CMS added CPT codes 99487 and 99489 to the list of primary care services used to attribute patients under the total per capita cost measure for 2018.

## 7. Cost Category Score Calculation in 2018

For 2018, the Cost category score would be average score of the two applicable measures - MSPB and Total Per-Capita Cost for All Attributed Beneficiaries. Both the measures will be scored on a decile scale (0-10 points).

- If only one measure can be scored, the score on that measure will determine the Cost Category score.
- If the eligible clinician or group cannot meet the case-minimum for both the Cost category measures, the weight of the Cost category (10%) will be reassigned to the Quality category (50%), making it 60%.

## 8. Getting ready for the Cost Measures in 2018

The calculation of the two Cost measures requires data that is not easily available to most practices. This combined with the same year benchmark methodology makes it difficult to plan ahead. However, there are few things you can do to get ready:

- Review your prior year QRURs to understand your historical performance
- Analyze your 2017 cost performance category score as soon as it becomes available.