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MIPS Final Rule: Navigating the transition year

On October 14, 2016, the Centers for Medicare & Medicaid Services (CMS) published its final rule implementing the new Medicare Quality Payment Program, including the Merit-Based Incentive Payment System, or MIPS. In response to providers’ concerns, CMS has made significant modifications to the proposed rule to ease program implementation.

Specifically, CMS has made four key changes in this regard:

(1) Revised low-volume threshold for MIPS exclusion
(2) Minimal reporting requirements to avoid penalties
(3) Elimination of cost component
(4) Fewer required measures on which to report

Keep in mind these changes apply to the 2017 performance year only, as CMS intends to ramp up the program in the following two years. CMS will establish the rules for performance year 2018 in 2017 through the normal rulemaking process. 

(1)  Revised low-volume threshold for MIPS exclusion

Under the proposed rule, CMS would have excluded from MIPS any individual clinician or group practice that had less than or equal to $10,000 in Part B allowable charges and provided care for less than or equal to 100 Part B-enrolled beneficiaries. Based on historical data, CMS estimated 225,615 clinicians (identified by TIN/NPI) would be excluded from MIPS under this low-volume threshold. (CMS did not revise the definition of “clinician” for purposes of MIPS; it still includes all Part B-enrolled physicians [MD, DO, DDS and DC], nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and physician assistants.)       

In the final rule, CMS revised the low-volume threshold to exclude from MIPS any individual clinician or group practice with less than or equal to $30,000 in Part B allowable charges or less than or equal to 100 Part B-enrolled beneficiaries. According to CMS, a total of 383,525 clinicians would be excluded from MIPS under these criteria, or 157,910 more than under the proposed rule. This represents 32.5 percent of all clinicians and 27.7 percent of all MDs and DOs, primarily primary care providers and those specialists serving younger populations (e.g., pediatricians, OB/GYNs).

When one accounts for the other two MIPS exceptions – providers newly-enrolled in Part B and Qualifying APM Participants – in addition to the low-volume threshold, the total number of clinicians excluded from MIPS in 2017 is just over 40 percent (or about 35 percent of all MDs and DOs).

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MIPS Exclusions for 2017 Performance Year

MIPS Eligible—59.2% (698,486)
Low Volume—32.5% (383,525)
Newly Enrolled—7.2% (85,484)
Advanced APM—1.1% (12,764)

 

Based on Table 58, MIPS Exclusions By Reason and Specialty For MIPS Transition Year.

In the final rule, CMS also defined the low-volume threshold determination periods for the 2017 performance year. Initially, CMS will use data from September 1, 2015, to August 31, 2016, with a 60-day claim run out to identify and then notify excluded clinicians and group practices prior to the start of the performance year (or soon thereafter). Then, to account for changes occurring during the performance year, CMS will use data from September 1, 2016, to August 31, 2017, with a 60-day claim run to identify additional excluded clinicians and group practices. 

CMS notes the low-volume threshold exclusion will be applied at the individual clinician (NPI/TIN) level for those reporting individually and the group practice (TIN) level for group reporting. A clinician may qualify for the exclusion at the individual (TIN/NPI) level, but if that clinician is part of a group that does not meet the criteria, he or she would be required to participate in MIPS as part of the group.       

(2) Minimal reporting requirements to avoid penalties

For the 2017 performance year, a clinician subject to MIPS has four reporting options, each with corresponding consequences:

 

2017 reporting options

(report individually or

as part of group practice or MIPS APM)

Penalty on 2019 MPFS payments

2019 bonus payments

Do not report any data on 2017 performance

 

4 percent penalty on all 2019 MPFS payments

Not eligible for any bonus

Report 2017 performance on one measure in the quality component, one clinical practice improvement activity, or the required measures for advancing care information

 

No penalty

Not eligible for any bonus

Report performance for minimum of a 90-day continuous period in 2017 on more than one measure in the quality component, more than one clinical practice improvement activity, or more than the required measures for advancing care information for minimum of 90-day continuous period

 

No penalty

Eligible for bonus up to 12 percent on all 2019 MPFS payments (amount varies based on composite performance score and budget-neutral scaling factor)

Report results on all required measures for minimum of 90-day continuous period in 2017.

No penalty

Eligible for bonus up to 12 percent on all 2019 MPFS payments (amount varies based on composite performance score and budget-neutral scaling factor).

Eligible for additional Exceptional Performance Bonus of up to 10 percent of Part B charges if  composite performance score is ≥ 70 (amount varies based on actual composite performance score and distribution of $500,000,000 annual fund).

 

 

Under the MIPS final rule, most physicians’ MPFS payments will be higher in 2019 as compared to 2018. First, a physician who does not report through the Physician Quality Reporting System on 2016 performance will face a 6 percent penalty on MPFS payments in 2018. A physician who does not report through MIPS on 2017 performance, however, will be subject to only a 4 percent penalty. 

Second, the Meaningful Use Program will sunset in 2016, meaning physicians no longer will be subject to a 3 percent penalty for failure to attest after 2018. The maximum penalty to which a physician may be subject in 2018 will be 9 percent, but only 4 percent in 2019. Also, more physicians will be eligible for bonus payments under MIPS as compared to the current Physician Value Modifier Program due to manner in which bonuses are calculated. 

(3) Elimination of the cost performance component

In the Medicare Access and CHIP Reauthorization Act of 2015, Congress directed CMS to calculate MIPS composite performance score using the following formula:  

  • 30 percent quality performance
  • 30 percent cost performance
  • 25 percent advancing care improvement
  • 15 percent clinical practice improvement activities. 

However, Congress afforded CMS some flexibility in implementing MIPS. Initially, CMS proposed to phase in the cost performance component, starting with 10 percent in 2017 and increasing up to 30 percent by 2019.  Now, in the final rule, CMS has set the cost performance component at zero for 2017, 10 percent for 2018 and 30 percent in 2019. To balance the equation, CMS has increased the quality performance component to 60 percent for 2017 and 50 percent for 2018. 

CMS still will calculate clinicians’ scores on specific cost performance measures and give that information in feedback reports to clinicians. These measures include a total per capita cost for all attributed beneficiaries, Medicare spending per beneficiary measures and 10 episode-based measures.  CMS previously has calculated these measures at the practice group-level for inclusion in the Quality and Resource Use Reports (QRUR) distributed as part of the Physician Value Modifier Program.

(4) Fewer required measures on which to report

Quality Performance Component

CMS had proposed to require clinicians and groups to report on:

(1) Six quality measures, including one cross-cutting measure (except for non-patient-facing clinicians) and one outcome measure (or an additional high priority measure if no outcome measure is available).

or

(2) One specialty-specific or subspecialty-specific measure set. 

In the final rule, CMS has eliminated the requirement to report on a cross-cutting measure.  While still encouraging clinicians to perform and submit date on these measures, CMS recognized these measures are not always meaningful for all clinicians.

Clinical Practice Improvement Activities Component

CMS has reduced the number of activities on which most clinicians must report from six to four. Groups with 15 or fewer participants and clinicians practicing in rural and health professional shortage areas will only have to report on two activities. 

Also, participants in certified patient-centered medical homes, comparable specialty practices or an alternative payment model designated as a medical home model will automatically receive full credit for this component. For 2017, participants in MIPS APMs (including the Medicare Shared Savings Program [all tracks] and the Oncology Care Model) will also receive full credit.    

 Advancing Care Information (ACI) Component

Under this component – the successor to the Meaningful Use program – CMS had proposed requiring reporting on 11 measures, but now has reduced that number to five.

CMS also has changed the definition of “hospital-based” clinician (who are not required to submit data under the ACI component) to include those clinicians who perform at least 75 percent of covered professional services in a hospital inpatient, on-campus outpatient hospital or emergency department setting. CMS will make this determination based on claims for a specified period prior to the performance year. 

Finally, non-physician practitioners – regardless regardless of where they practice – may may elect not to submit data under the ACI component, in which case it will be re-weighted as 0 percent. CMS has recognized these clinicians may require additional time to meet the requirements of the ACI component, given they were not subject to the Meaningful Use program.

There is, of course, much more to the 2,400–page final rule than the easing of the transition to MIPS including, but not limited to, a thorough explanation of how data is to be reported, how the composite performance scores will be calculated and made publicly available and how payment adjustments will be made.  Plus, there’s still more to come:  CMS promises to publish baseline scores for all measures to be used in calculating clinicians’ and groups’ scores prior to the start of the performance year (or as soon as possible thereafter).    

Although CMS has done much to ease the transition to MIPS, clinicians and groups should not pull back on their preparations. Even with many requirements scaled back for the first performance year, MIPS still will fundamentally change how physicians and other clinicians are paid and evaluated by patients, peers and payers. Now is the time for providers to gain a working knowledge of MIPS and begin evaluating strategies for success.