MIPS 2017 Incentives : OMG! CMS Analysis Was Spot On

In our last blog, we had discussed about the MIPS 2017 performance feedback reports that became available on June 29, 2018. These reports provide the final MIPS score and the corresponding final payment adjustment that will be applied to 2019 Part B payments. For most people, the final scores were what they expected. However, many are crying foul over the payment adjustments. Some congressmen even sent a letter to the CMS administrator expressing disappointment regarding the final payment adjustments, and that they may NOT be a “meaningful opportunity” for the providers. This reaction is really surprising. Let me explain why.

As per the 2017 MIPS performance feedback reports, the providers who have a MIPS score of 100 have earned a payment adjustment of 2.02%, which is very close to the 2.38% estimated by CMS in the 2017 MACRA Final Rule.
As per the 2017 MIPS performance feedback reports, the providers who have a MIPS score of 100 have earned a payment adjustment of 2.02%, which is very close to the 2.38% estimated by CMS in the 2017 MACRA Final Rule. 

MIPS is a budget neutral program which means that the amount collected from negative payment adjustment from underperformers is used to pay the positive payment adjustment to those who meet or beat the performance targets. In simple words, the positive payment earned by the overperformers depends on the amount collected as penalty. There is a second component of bonus for the “Exceptional Performers”. This is a fixed amount of money ($500 million per year) that is to be distributed between all the providers who meet the exceptional performance” definition (MIPS score of 70-100 for 2017). So, the final positive payment adjustment depends on how everyone else performs which is not known till everyone has submitted their data. CMS provided estimated “scaling factors” in the 2017 Final Rule that could be used in a simple math formula to calculate the payment adjustments for both components defined above. We explained this MIPS score and payment adjustment calculation in detail in a previous blog. You can also read more on the scaling factors and how the MIPS Calculator works. Based on the scaling factors that CMS had provided for 2017, the estimated positive adjustment for a provider with MIPS score of 100, billing $100,000 in estimate Part B payments was $2,379 or 2.38%. The 2017 MIPS performance feedback reports for providers who have a MIPS score of 100 shows a payment adjustment of 2.02%. CMS administrator Seema Verma had announced earlier this year that CMS had exceeded the MIPS participation goal for 2017. That obviously decreased the positive payment adjustment and could account for the delta of 0.36%. Considering all the variables that CMS had to take into consideration, it is amazing how accurate this estimate was. I hope someone at CMS got kudos for that. That team (or person) could have a really bright future in the stock market.  

The above-mentioned scaling factors were described and the math was clarified in the 2017 MACRA final rule. Our free MIPS Calculator app was used by many providers last year to calculate the estimated numbers. The monthly MIPS report provided by our partners clearly shows the maximum possible payment adjustment based on providers estimated Part B payments on every single report using the same calculation.

So what is all the hue and cry about?

Here is what happened:

The maximum penalty for 2017 was 4%. If half of the providers got the full penalty, the positive payment adjustment (excluding the exceptional performance bonus) for the other half could have reached 4%. However, the sales and marketing teams selling MIPS solutions didn’t want to clarify this. Therefore, many providers were made to believe that they could get the 4% positive payment adjustment if they just earned a good MIPS score. CMS lowered the bar in 2017 so much so that less than 10% providers had to pay the penalty. That obviously decreased the maximum possible positive payment adjustment.

The budget neutral plan is brilliant but it has the risk of not creating a “meaningful opportunity” if everyone performs well. Is there a way to make that better? Yes. CMS could use a percentile system to grade the score of all the providers. The bottom 50% pay the penalty, the top 50% get the bonus. That will increase the chances of getting a higher positive payments. However, what do you think the bottom 50% would do in that case? What can CMS do in this fire to frying pan situation? It's damned if it increases the Low Volume Threshold, and damned if it doesn't.

Like any other new program, MIPS has been center of controversies from the day it was announced. The controversies have ranged from demanding a complete cancellation to making it more rigid. As a company that provides solutions to excel under MIPS, we hope that CMS makes changes that make the incentives more meaningful for high performers.  However, I am not sure what is the definition of “meaningful”. MIPS scores will be publicly available soon. The reputation impact of MIPS score further complicates this determination. An absolute 2% bonus could be meaningful in most scenarios. However, it is really based on the amount of effort required to get that score. If your EHR vendor has done it right, your effort could be minimal. You just click a button at the end of the reporting year, and the reporting is done. If not, you may have to pay more to your EHR vendor or to an external vendor to just complete the reporting. It is frustrating that after spending billions of dollars over the last decade on “interoperability”, most of the EHR vendors still don’t have a cost-effective way to share this data today.

The lack of interoperability is the core issue, not the payment amounts. Over that last few months, CMS has proposed significant changes focused on interoperability. I believe some of the changes are more meaningful than any other program we have seen before. What makes it different this time? It is the focus on FHIR®. If you haven’t heard about FHIR yet, you must get familiar with it, as FHIR could be the game changer to solving MIPS issues and beyond.

There is light at the end of the tunnel. Contact us to learn more about our FHIR solutions that can simplify MIPS for your organization and how you can get an accurate estimate for your 2020 MIPS payment adjustments.