The Components of the Merit-Based Incentive Payment System

The Merit-Based Incentive Payment System (MIPS) represents a change to the traditional fee-for-service (FFS) reimbursement system for Medicare providers that was created by the Medicare Access and CHIP Reauthorization Act (MACRA) in April of 2015. According to the language of MACRA, separate criteria will be used to evaluate compliance with CMS objectives based on whether an eligible provider is utilizing a more “value-based” alternative payment model (APM) or a more traditional FFS model for billing purposes. By 2019, MIPS will be the basis for the hard criteria that will determine yearly adjusted alterations to the physician fee schedule (PFS) for Medicare eligible providers (EPs) who do not meet criteria for either a qualifying APM provider (QP) or a partially qualifying APM provider (partial QP). This program has been left open to interpretation by the Secretary of Health and Human Services in regard to specific rules with a requirement to seek industry feedback; consequently, a foundational understanding of this system is critical for all providers who wish to either contribute to or be informed about this upcoming modification to the PFS.

Eligible Providers

According to the MACRA definitions, anyone who is or has the potential to become a Medicare-eligible provider can have his or her reimbursements significantly affected by the adoption of this system by 2019. Thus a fundamental understanding of this program may have profound implications for a provider’s ability to meet the needs of his or her patient population. MACRA’s definition of an eligible provider currently includes practicing physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists, but can be extended to include certified nurse midwives, clinical social workers, clinical psychologists, registered dietitians or nutrition professionals, physical or occupational therapists, qualified speech-language pathologists, or qualified audiologists.(1) Current rules allow for the formation of “virtual groups” of no more than 10 EPs to report as a single entity for evaluation purposes for a given year. Although the details of the regulations involving virtual groups are still being crafted, current language in MACRA suggests that specialty or geographic classifications may dictate limitations of the scope of a virtual group.

The Four Proposed Components of a 2019 MIPS-Eligible Provider Evaluation

According to MACRA, the foundations of MIPS EP evaluation domains will be based on the “components of the three specified existing performance incentive programs.” These three specified initiatives include the Electronic Health Record (EHR) Incentive Program, the Physician Quality Reporting System (PQRS), and the Value-Based Payment Modifier (VBM) plus a new Clinical Practice Improvement Activity domain. Although each of these CMS initiatives currently is established as a discrete entity, the goal of MIPS will be to consolidate these standards into a single set of performance metrics that will be used not only for reimbursement schedules, but also for patient comparison through government-backed websites, such as Physician Compare.(2) A composite score based on four individually weighted key areas will be the basis for performance evaluation (Table 1).

Electronic Health Record Meaningful Use (Modified Stage 2 and Stage 3 Criteria)

Presumably, the MIPS Electronic Health Record requirements will be based on the finalized rules for modified Stage 2 and Stage 3 Meaningful Use that were published in October 2015.(3) Despite ongoing debate regarding the workability of these rules, given the limitations of current EHR interoperability, current legislation presumes that these rules will be in effect at the onset of MIPS performance reimbursement adjustments. Summarized rules for Stage 3 Meaningful Use are shown in Table 2.

Physician Quality Reporting System

The PQRS initiative was born from the Tax Relief and Health Care Act of 2006 as a means of gathering individual provider information in regard to one of many possible metrics that are designed to evaluate quality and value of care. As of the 2016 guidelines, 281 metrics in six National Quality Strategy domains were available for providers to report to CMS under the program (Table 3). This is a fairly substantial increase from the 225-measure set of the 2015 reporting period. The comprehensive list of measures can be downloaded in a single compressed file on the CMS website.(4) Current minimum requirements for participation in the program require nine metrics reported across at least three domains. These reported criteria began appearing on websites such as Physician Compare starting in early 2016 and are continuously updated based on reported performance.(2) Although the precise requirements for the adoption of these criteria under MIPS may be significantly different from current rules, their continued published use on publically accessible government sponsored websites will most likely remain under MIPS.

Value-Based Payment Modifier

Starting in 2015, CMS began instituting the VBM for groups of 100 or more eligible providers as a means to alter individual providers’ reimbursement rates based on data obtained from the 2013 reporting period.(5) All EPs will be assessed for a change in their individualized PFS from 2017 onward. As of the 2018 adjustment final rule,(6) the geographically, specialty, and risk-adjusted VBM composite score from the 2016 reporting period will be calculated through a bell curve evaluation of both weighted contributions of three quality and outcome performance metrics and weighted contributions of seven primary cost metrics (Table 4). The latter cost metrics are designed to determine the value-based use of clinical resources.

Although 2015 was the first year in which providers may have witnessed either supportive increases or punitive individualized reductions, this positive versus negative incentivizing method is the capacity in which the VBM is designed to function from 2015 onward. This PFS modifier is expected to be continued in either its current or an expanded form starting with the 2019 introduction of MIPS. Providers are not currently obligated to participate in PQRS due an alternative Administrative Claim reporting option. However, the VBM probably will become more intimately connected to the PQRS prior to a final consolidation under the MIPS umbrella due to complementarily triggered PFS reductions for nonparticipation in either or both.

Clinical Practice Improvement Activities

Currently, the domain of Clinical Practice Improvement Activities is not specifically defined by any of the CMS initiatives currently in place. The MACRA Request For Information (RFI) period has elicited feedback from many providers, however, on how this category should be defined. As it stands, the current proposal identified suitable metrics of the domain “as an activity that relevant eligible professional organizations and other relevant stakeholders identify as improving clinical practice or care delivery and that the Secretary determines, when effectively executed, is likely to result in improved outcomes.”(7) The current proposal identifies five potential subcategories:

• Integration of behavioral health and primary care;

• Emergency preparedness and response;

• Achieving health equality;

• Promoting health equity and continuity; and

• Social and community involvement.(7)

Current Issues and Looking Forward

Despite the advantages MIPS offers over the previous Sustainable Growth Rate (SGR) model for avoiding potential short-term devastating reimbursement cuts across the board, there is still concern in the industry in regard to how the subcriteria specific to MIPS currently in place will affect providers’ ability to meet the requisite functionality and infrastructure necessary to hit minimum requirements. Many organizations have written open letters to the Department of Health and Human Services expressing concern over this and other points during the October 1, 2015, through November 17, 2015, RFI period.(8)

Although the specifics of MIPS have been left open to input and interpretation at the discretion of the Secretary of Health and Human Services, it is important to understand that, in some capacity, the current programs designed to alter individual PFS reimbursements based on conformity to value-based measures will be present under MIPS. Many applaud the repeal of the SGR as a major step toward a more sustainable approach to the PFS(9); however, there remains lingering concern that this “permanent doc fix” will inevitably place the PFS in a worse position in regard to provider reimbursement compared with SGR after 2048.(10) Only time will tell if this “doc fix” remains truly permanent.

References

1. Request for information regarding implementation of the Merit-Based Incentive Payment System, promotion of alternative payment models, and incentive payments for participation in eligible alternative payment models. FederalRegister.gov . October 1, 2015; www.federalregister.gov/articles/2015/10/01/2015-24906/request-for-information-regarding-implementation-of-the-merit-based-incentive-payment-system#h-9 . Accessed July 28, 2016.

2. Physician Compare. Medicare.gov ; www.medicare.gov/physiciancompare/ . Accessed July 28, 2016.

3. Self RH, Coffin J. Modified Stage 2 and Stage 3 Meaningful Use for eligible providers: performance metrics, reporting period lengths, and hardship exemptions. J Med Pract Manage. 2016;31:332-335.

4. Measures codes. CMS.gov ; www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/MeasuresCodes.html. Accessed July 28, 2016.

5. Summary of 2015 Physician Value-based Payment Modifier Policies. Centers for Medicare & Medicaid Services. CMS.gov ; www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Downloads/CY2015ValueModifierPolicies.pdf . Accessed July 28, 2016.

6. Proposed policy, payment, and quality provisions changes to the Medicare Physician Fee Schedule for Calendar Year 2016. Centers for Medicare & Medicaid Services. CMS.gov . www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-10-30-2.html . Accessed July 28, 2016.

7. Request for information regarding implementation of the Merit-Based Incentive Payment System, promotion of alternative payment models, and incentive payments for participation in eligible alternative payment models. FederalRegister.gov ; October 1, 2015; www.federalregister.gov/articles/2015/10/01/2015-24906/request-for-information-rega rding-implementation-of-the-merit-based-incentive-payment-system#h-21 . Accessed July 28, 2016.

8. MACRA Sign-On Letter. AAAAI.org ; November 16, 2015; www.aaaai.org/Aaaai/media/MediaLibrary/PDF%20Documents/Advocacy/macra-sign-on-letter-16nov2015.pdf . Accessed July 28, 2016.

9. Wergin R. Take a bow, physicians—you defeated the SGR. Blogs.AAFP.org ; April 14, 2015; http://blogs.aafp.org/cfr/leadervoices/entry/take_a_bow_physicians_you . Accessed July 28, 2016.

10. Estimated financial effects of the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2). CMS.gov . April 9, 2015; www.cms.gov/research-statistics-data-and-systems/research/actuarialstudies/downloads/2015hr2a.pdf . Accessed July 28, 2016.