News | Physician Compensation

More physicians shift from MIPS to APMs in Medicare

News | Physician Compensation

More physicians shift from MIPS to APMs in Medicare

  • In 2018, physician participation in alternative payment models increased by 84%, while participation in the Merit-based Incentive Payment System (MIPS) decreased by 5%.
  • Among MIPS participants, 97% garnered increases of up to 1.68% of their annual Medicare payments.
  • Also in MIPS, 2% of physicians incurred payment cuts of up to 5% of their Medicare payments.

The number of physicians receiving Medicare payments through risk-based models sharply increased in 2018, while the much larger number for whom payment is based on quality-measure performance started to decline.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established criteria for Medicare to pay physicians through either the Merit-based Incentive Payment System (MIPS) or advanced alternative payment models (APMs). MIPS requires annual quality reporting to garner bonuses, avoid cuts or maintain payment levels, while APM participants generally garner 5% annual pay increases.

The simplified APM approach, in which the convening organization can collect and report clinician data on behalf of participating clinicians, appears to be drawing increasing physician interest.

The latest MACRA results showed that:

  • APM participation increased by 84% to more than 183,000.
  • MIPS participation decreased by 5% to nearly 890,000.
  • Of physicians paid through MIPS, 97% received a bonus payment of as much as 1.68%.
  • Of physicians paid through MIPS, 2% were dealt payment cuts of as much as 5%.

Among closely watched categories of participants that are considered vulnerable to payment cuts, 97% in rural practices garnered a bonus (compared with 93% in 2017), and 84% of small practices received a bonus (versus 74% in 2017).

Clouds on the horizon

In a blog post, Seema Verma, administrator of CMS, warned that the agency expects the number of physicians earning MIPS bonuses to decrease in future years as the quality requirements become more stringent. But the size of bonuses should increase after dropping from a high of 1.88% last year.

Francis J. Crosson, MD, chairman of the Medicare Payment Advisory Commission (MedPAC), said at the group’s Dec. 5 meeting that he expects physician support for MIPS to plummet as payments tighten “based on very small putative changes in quality.”

“At that point, there may well be some further stronger consideration about changing things, but I think we have a little bit of a ways to go at the moment,” Crosson said.

MedPAC has urged changes to MACRA, including replacing MIPS and its reporting of “process measures,” which commissioners have said imposes a significant burden on clinicians.

CMS has responded to physician criticisms by recently announcing that it plans to use more outcome measures in MIPS starting in 2021.

MedPAC also has recommended that Medicare limit APM bonuses to physicians in models that actually are reducing Medicare spending.

Medicare physician payment trends

The latest Medicare payment report followed MedPAC’s revelation that the program’s payments are falling behind those of commercial health plans. Specifically, commercial PPO rates for physicians were:

  • 135% of Medicare rates in 2018
  • 134% of Medicare rates in 2017
  • 122% of Medicare rates in 2011

MedPAC staff noted that the ratio between commercial PPO plan rates and Medicare rates varied by type of service. For example, in 2018 commercial rates were 128% of Medicare for E&M office visits and 169% for coronary artery surgery.

The increase in commercial PPO rates potentially stemmed from the increased bargaining power that practices have gained from consolidation in recent years, according to MedPAC staff.


About the Author

Rich Daly, HFMA senior writer and editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


Related Articles | Physician Compensation

Blog | Coronavirus

COVID-19 impact on independent primary care physician practices could accelerate the shift to value based payment

Health plans are taking this opportunity to align more closely with independent PCPs, including BCBS of North Carolina, where practices’ acceptance of financial support requires them to join one of health plan’s existing ACOs.

News | Value-Based Payment

Medicare reopens application period for Direct Contracting models

CMS opened the application process for Direct Contracting models to more providers.

Research & Reports | Physician Compensation

Physician Compensation Systems Survey

Survey analysis reveals important learnings from a February 2020 HFMA-conducted study, sponsored by Ludi, about physician compensation.

Research & Reports | Physician Compensation

Survey: Understanding and mitigating risk in compensating physicians

Important learnings from a February 2020 HFMA-conducted survey about physician compensation, where healthcare organization leaders offer insights on the complexities of the process.