MIPS Payment Adjustment: How the Merit-Based Incentive Payment System will impact your payments

MIPS Payment Adjustment

The Merit-Based Incentive Payment System (MIPS) is a budget-neutral Medicare payment program under MACRA, which means that the total upward and downward adjustments will be balanced so that the average change is 0%. Although the first MIPS payment adjustment will not occur until calendar year 2019, the first MIPS performance period will begin on January 1, 2017.

2017 is a transition year with a lower bar for increasing your payments

CMS has established 2017 as a transition year to help providers ramp up MIPS participation. Providers will be able to avoid a negative payment adjustment in 2019 (based on 2017 performance) by earning at least 3 points out of 100, which can be achieved by submitting data for one quality measure, one improvement activity, or the five base measure in the Advancing Care Information category.

Beyond avoiding a negative payment adjustment, there are opportunities for top performers to earn bonuses. Clinicians who achieve a final score of 70 or higher will be eligible for an exceptional performance adjustment, funded from a pool of $500 million.

In future years, the MIPS program will increasingly reward high-performing providers with positive payment incentives, and the program will increasingly penalizing low performing providers, including those that submit all required data to CMS but do not meet performance benchmarks.

How can you make sure that you’re one of the MIPS eligible clinicians who gets a positive payment incentive in 2019 and beyond? Well, there are a number of things you’ll likely need to do between now and the end of 2017, but one of the first is truly understanding how MIPS applies payment adjustments so you can ensure you’re focusing on the areas that need the most improvement and impact your overall performance.

Comparing Medicare providers to their peers

MIPS evaluates eligible clinicians and groups across four weighted performance categories (Quality, Resource Use, Clinical Practice Improvement Activities, and Advancing Care Information) in order to calculate an individual- or group-level MIPS Composite Performance Score (CPS) that ranges from 0 to 100 points. At the end of each performance period, CMS will compare each MIPS eligible clinician’s performance to a MIPS performance threshold.

CMS has set a 2017 MIPS performance threshold of three points, which means that eligible clinicians who earn three points will receive a neutral payment adjustment, those who earn under three points will earn a negative adjustment, and those who earn over three point will receive a positive adjustment. Looking toward the future, MACRA requires that in year three and beyond of the MIPS program, the MIPS performance threshold will be equal to the mean or median of final scores from a prior period.

Here is an overview of the CPS levels and associated payment adjustments in 2017:

Composite Performance Score Status in 2017 Payment Adjustment Yield in 2019
0 – 0.75 A negative payment adjustment of -4%
0.76 – 2.9 A negative adjustment up to -4%, based on the degree to which the CPS falls below the threshold of three points and the overall CPS distribution, to ensure budget neutrality
3.0 0% payment adjustment
3.1 – 69.9 A positive payment adjustment of up to 4%, with the potential for a higher upward adjustment based on the degree to which the CPS exceeds the threshold of three points and the overall CPS distribution, to ensure budget neutrality
70.0 – 100.0 A positive payment adjustment plus an additional bonus adjustment of up to 10% for top performers

Measuring and attributing performance scores under MIPS

In response to requests for more flexible options when participating in Medicare programs, CMS has allowed MIPS eligible clinicians to have their performance measured as an individual, as a group defined by a single Tax ID Number (TIN), or as an APM Entity group using the APM scoring standard. However, for the purposes of applying the MIPS payment adjustment factors to future Medicare Part B payments, only a single identifier, TIN/NPI, will be used for all MIPS eligible clinicians—regardless of whether the TIN/NPI was measured as an individual, group, or APM Entity group.

CMS will use the Composite Performance Score (CPS) to apply the MIPS payment adjustment at the TIN/NPI level as described below:

  • For individual MIPS eligible clinicians submitting data using TIN/NPI, CMS will use the CPS associated with the TIN/NPI that is used during the performance period.
    For groups submitting data using the TIN identifier, CMS will apply the group CPS to all the TIN/NPI combinations that bill under that TIN during the performance period.
    For eligible clinicians in MIPS APMs, CMS will assign the APM Entity group’s CPS to all the APM Entity Participant Identifiers that are associated with the APM Entity.

Big dollars are available for those who act in 2017

For the first year of MIPS, it is relatively easy to avoid a negative payment adjustment. However, 2017 will also likely be the easiest year to access the bonus incentive pool, by achieving a score of 70 points or more. Especially since CMS has made it clear that Medicare providers will be compared to their peers under MIPS, choosing to take action in early years of the program could prove to be very fruitful. What is your physician group doing to be one of the top Medicare performers in 2017?

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Further reading:
How using the MIPS 90-day reporting period will increase your 2017 Composite Score
Avoiding a penalty in 2018 MIPS: the nuts and bolts

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