Value Based Payment

The Collateral Impacts of MIPS

September 7, 2017 11:08 am

Besides its direct impacts on Medicare payment, which are familiar to most CFOs, the Merit-Based Incentive Payment System (MIPS), created by the Centers for Medicare & Medicaid Services (CMS), also produces collateral impacts on the strategies and operations of provider organizations. In particular, the fact that more than half a million clinicians will garner MIPS scores within the next 12 months will significantly affect the public reputation, recruiting, and compensation of clinicians in ways extending beyond year-to-year Medicare payment adjustments.

Clinician Reputation

CMS will publish all scores on its Physician Compare website, which patients can then use to make informed decisions about where to get their health care. CMS binds the MIPS score to each clinician’s unique national provider identifier (NPI) so the score earned each year is a lasting part of a clinician’s resume, even if the clinician moves to a different organization. Furthermore, the payment adjustment is inherited by the new organization based upon the clinician’s historical scores.  

Some estimates of the revenue impacts of consumers influenced by MIPS scores in selecting clinicians can be much larger than the payment aspect of the program. For example, research on the influence of the consumer site Yelp, which delivers clinician ratings as part of its offerings, has shown that a 1-star increase on Yelp’s 5-star rating system generates an increase of 5 to 9 percent in revenues. Healthcare organizations stand to gain revenue increases far above and beyond the impact of CY17 MIPS payment adjustments.

The revenue impacts of consumer choice driven by clinicians’ public reputations threaten not only to dwarf the impacts of MIPS payment adjustments but also to potentially last much longer. It is more difficult for an entity to recover from a one-time damaged reputation in the eyes of consumers than it is to simply turn around an annual score for CMS payment purposes.

Clinician Recruiting

Provider organizations increasingly will want to know a clinician’s historical MIPS scores during the clinician recruitment process. Poor scores will have negative financial consequences for the hiring organization through inheriting the MIPS payment adjustments. On the other hand, high scores will financially benefit the organization and potentially make those clinicians harder to competitively recruit. Another dynamic is that clinicians are likely to favor organizations with proven abilities to enable high MIPS scores for their clinicians.

Clinician Compensation

Clinicians should do their part to achieve organizational success under MIPS, regardless of whether the organization decides to report clinicians individually for MIPS or as a group based upon aggregate performance. Clinician workflows and habits may need to be altered to maximize scores across the four performance categories of MIPS (quality, advancing care information, improvement activities, and cost). CFOs and compensation experts are beginning to think of ways to incorporate the MIPS score into performance or value-based components of how clinicians are paid. By the same token, clinicians want to know how their scores are trending, how they can improve, and what short- or long-term impacts MIPS may have on them financially.

As exemplified in the 2018 Quality Payment Program proposed rule, MIPS regulations are complex and require a dedicated effort to understand, estimate, and plan for their direct payment impacts. However, growing numbers of provider organizations are realizing that MIPS has broader and potentially deeper implications than those directly stated in the regulation. As MIPS regulations are updated annually, it is good practice to monitor the direct and indirect impacts, such as the three outlined above, and to think through what other aspects of strategy and operations could be affected. 

 Tom S. Lee is CEO and founder, SA Ignite, Chicago. 


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