MIPS: Getting Ready for a New Paradigm in Pay for Performance

September 5, 2017 10:37 am

With little time left to begin collecting and reporting data, organizations that have not yet begun meaningful participation in MIPS should consider the risks and potential rewards the program.

With little time left to begin collecting and reporting 2017 data for participation in the Merit-based Incentive Payment System (MIPS), some smaller organizations may have waited to act because their leaders believe the administrative and labor costs of participation in incentive-based payment may simply be too high to make it worth their while. But considering the impact of this new pay-for-performance program, these organizations are well advised to take a closer look at the potential benefits and risks.

MIPS is one of two payment tracks under the new Quality Payment Program (QPP) created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The other involves advanced alternative payment models (APMs), which include organizations in Medicare Shared Savings and bundled payment programs. MIPS is the rollup successor to Medicare Meaningful Use, the Physician Quality Reporting System (PQRS), and Value-Based Modifier (VBM) programs, and it is in force now, with calendar year 2017 marking the performance year. MIPS payment adjustments are applied to Medicare Part B payments two years after the performance year, so 2019 will be the first year of penalties/rewards.

Beginning this year, MIPS defines four categories of eligible clinician performance, contributing to a final score of up to 100 points.

  • Quality: 60 percent
  • Advancing care information (the renamed meaningful use): 25 percent
  • Clinical practice improvement activities: 15 percent
  • Resource use: 0 percent for 2017 (to be weighted for 2018 and beyond)

Carrying the most weight, quality is arguably the most important of these categories.

But payment is not the only area of impact for the QPP. The Centers for Medicare & Medicaid Services (CMS) will publish each eligible clinicians’ annual final score and the scores for each MIPS performance category within approximately 12 months after the end of the relevant performance year. For the first time, consumers will be able to see their clinicians rated on a scale of 0 to 100 and to compare their clinicians with their clinicians’ peers nationally. A poor performance in the first year of the program would have lasting implications for an individual provider and for the provider’s group as a whole.

Risk Versus Reward

Both MIPS and the advanced APMs can result in revenue, if implemented appropriately. The outcome is highly dependent on the quality of the clinical documentation, the accurate capture of codes to identify the acuity of the patient’s condition, the services provided to the highest degree of specificity possible, and the fastidious tracking of utilization and costs.

Healthcare organizations often fail at cross-communication among departments. Organizations that wish to succeed under MIPS must find ways to break down departmental silos. It is imperative that clinicians, clinical documentation improvement professionals, the coding team, health information management (HIM) technology professionals, and the billing support team work together, with the support of leadership, to take advantage of the opportunities MIPS provides.

Any group is eligible to participate in MIPS if it bills more than $30,000 annually to Medicare and care is delivered to more than 100 Medicare beneficiaries per year. Organizations can choose to start the process of gathering and reporting data for 2017 any time before Oct. 2. The deadline for submitting these data is March 31, 2018. The first payment adjustments based on performance go into effect on Jan. 1, 2019.

With just a month left to collect data, now is the time for organizations that have been putting it off to begin. Those that don’t participate will face a penalty of 4 percent of baseline Medicare revenue. Even reporting on one area can negate this adjustment. Submitting 90 days of data can result in a neutral or slightly positive payment adjustment; a full year of data can result in a moderately positive payment adjustment.

The size of the adjustment is dependent upon how much data is submitted and the organization’s performance on quality measures. MIPS payment adjustment is based on evidence-based and practice-specific quality data. Just as the penalty for failure to participate is 4 percent, success on quality could lead to as much as a 4 percent increase in payment in the first year. The amount at stake will gradually rise to 9 percent in 2022 and beyond.

The exhibit summarizes the elements of MIPS participation.

MIPS at a Glance

For each performance year, CMS must establish a performance threshold at which providers would experience no adjustment to their Medicare Part B payments. Each incremental point that a provider earns above the threshold results in progressively higher incentive payments, whereas for each point the final score is below the threshold, the provider is assessed a proportional penalty until a floor is reached. Consequently, virtually every provider will experience some payment adjustment, either positive or negative, which greatly escalates the level of competition among providers and their need for rapid and effective improvement.

MIPS in Practice

MIPS essentially adopts the quality measures and reporting methods from the PQRS and VBM programs. a Most clinicians must report up to six quality measures, across any combination of categories, or domains, and one measure must be an outcome measure. (In addition to the six measures, CMS calculates one population measure for groups with 16 or more clinicians and a minimum of 200 cases.) For MIPS, there are six quality domains: community/population health, effective clinical care, efficiency and cost reduction, patient safety, person and caregiver-centered experience, and communication and care coordination.

For each quality measure, an organization can earn a possible 10 quality points, bringing the total available to 60. The number of points earned is based upon the percentile-basis performance of that measure relative to national peer benchmarks. For example, if a provider has a 62 percent performance rate on a measure, and that rate is higher than the rates for 60 percent of peers reflected in the benchmark, then that measure would earn 7 out of 10 possible points.

Case Study

A 10-physician orthopedic practice that bills Medicare Part B $3 million annually decided to report data to CMS via registry in a batch process at the end of the year, instead of on a claim-to-claim basis, to allow for more options on measures selected. The group decided first on four measures involving patients undergoing total knee replacement across two domains. The measures were as follows:

No. 350: Trial of conservative (nonsurgical) therapy (Domain: Communication and Care Coordination)

No. 351: Venous thromboembolic and cardiovascular risk evaluation (Domain: Patient Safety)

No. 352: Preoperative antibiotic infusion with proximal tourniquet (Domain: Patient Safety)

No. 353: Identification of implanted prosthesis in operative report (Domain: Patient Safety)

These measures were selected to allow the practice to gain efficiencies in the process, because the patients meeting the criteria for the denominator of the equation were all the same—that is, all patients that had total knee replacement services involving CPT codes 27438, 27442, 27445, 27446, and 27447.

A review could be performed of all four measures at the same time to allow for capturing the correct quality code indicating whether the measure had been met. Using these measures as the core made education more efficient because training on clinical documentation needs and the rules around the measures focused on the same patient base.

Next, the organization selected another measure in the patient safety domain—No. 130: documentation of current medications in the medical record—because the practice already had a strategy and expectation in place to review medication lists on every patient visit. The only addition to the workflow would be to capture the appropriate code. Including this measure not only helped meet the MIPS quality requirements, but also allowed internal quality monitoring of staff to verify that they consistently met this expectation of their job. This measure also did not involve physician time, because it was performed by ancillary staff.

The outcome measure selected was in the communication and care coordination domain—No. 223: functional status change for patients with general orthopedic impairments. This measure involves more education and training; however, it is important to track the patients who receive physical and occupational therapy due to functional orthopedic limitations and to measure the efficacy of the services received to capture functional status changes. The population captured in this measure includes all patients 14 years of age or older who have therapy services identified by a subset of CPT codes.

Prior to implementation, the physicians and all relevant staff received training on the selected measures and needed documentation. Education also was provided to the clinical documentation improvement team, to facilitate concurrent reviews.  

Much of the initial review and follow up was the responsibility of the HIM and/or coding staff at the time the record was coded, with the exception of the medication review measure. For all others, the electronic health record (EHR) allowed alerts to be set if a code in the denominator set was chosen, to identify that it was a quality measure. Although the practice experienced an initial slowdown of productivity among staff looking for MIPS codes to report and ensure that the documentation was thorough, over time, the staff became more familiar with the measures and documentation needs and clinicians improved their documentation.

Ancillary staff who reviewed and updated the patients’ medication list also were tasked with assigning the correct quality code to support the initiative. Random monthly reviews were completed by HIM and/or coding staff to ensure this information was being appropriately captured.

Monthly reports were run for all codes indicating the measure was not met by the physician, to allow for tracking and trending to further expand the clinical documentation improvement needs. Samples of these records went back to the physician to allow for review and discussion. Over time, fewer and fewer records were returned to physicians. 

Work Rewarded

The physician group met all MIPS components. The organization fulfilled the criteria under the quality measures, reporting on the correct patient population identified in the denominator and attesting to improvement initiatives. It satisfied the advancing care information through the EHR including e-prescribing, producing and accepting patient care summary information electronically, and having a strong and HIPAA-compliant security process and program, with security safeguards for EHR login and access.

As a result of its work, the practice stands to receive an increase of $120,000 in 2019. Although a small return, continuing losses of the same amount would quickly produce a significant financial impact for both the overall group and the individual physicians. As the percentage of risk and return changes, with a pattern of $3 million billed annually, by the year 2022, the practice could experience either a payment or loss of $270,000 per year. In a large primary care medicine practice within a health system, such figures would be multiplied many times over.

Although there is some initial expense in training of staff and some slowdown in production by coders to do more extensive review to capture the appropriate codes for the program measurement, that expense should lessen over time as the measures become captured accurately and clinical documentation improves to support the initiatives.

With payments focused increasingly on quality of care and quality initiatives, physicians with the best clinical practices, as supported by clinical documentation and the most accurate coding, stand to receive higher payments and enjoy an improved reputation. With the public display of performance information via Medicare’s Physician Compare, consumers will be able to make informed decisions about which healthcare providers they use. Practices with higher quality scores may also use this opportunity for marketing to patients and referral networks.

For practices that focus on the program’s design to increase care coordination, improve documentation, and realize defined clinical outcomes, the rewards of MIPS will be manifold. 

Jennifer Swindle is vice president of quality and service excellence, Salud Revenue Partners, Lafayette, Ind.

Susan Houck Clark is president, SD Clark Consulting, LLC, Lafayette, Ind.


a.  CMS Measures Inventory, Centers for Medicare & Medicaid Services, June 2017.


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