The first performance year of the Merit-based Incentive Payment System (MIPS) is almost over, meaning it’s too soon to make any judgements on how year one went for Quality Payment Program (QPP) participants. But new research speculates that performance in a prior quality reporting program—the Physician Value-Based Payment Modifier (VM) program—may shed some light on how clinicians will treat MIPS.
In the December issue of Health Affairs, researchers from the St. Louis-based Washington University School of Medicine, Harvard, the University of Michigan and the Department of Health and Human Services (HHS) studied the VM program, which they said is “the largest U.S. ambulatory care pay-for-performance program to date and a precursor to the forthcoming [MIPS].” Indeed, this program is one of several of its kind that is now rolled up into MIPS for eligible providers.
In its first year, the VM program included practices with at least 100 clinicians. Researchers found that slightly more than 1,000 practices met this criterion, 899 of which had at least one attributed beneficiary. Of those latter practices, 263 (29.3 percent) failed to report performance data and received a 1-percent reporting-based penalty, the researchers found.
As such, this study’s findings led the researchers to believe that we potentially could see similar results for MIPS, which is one payment path that eligible Medicare clinicians can partake in within MACRA’s Quality Payment Program.
As explained by the researchers, participating practices in the VM program were required to participate by reporting data to CMS (Centers for Medicare & Medicaid Services) on at least nine quality measures across three quality domains or by electing to report via a set of administrative claims–based measures calculated by CMS to reflect the care they delivered in 2013, the first VM program year. Practices that failed to report were penalized by having 1 percent of their 2015 Medicare physician fee schedule billings withheld.
Meanwhile, groups that successfully reported measures had an additional option: They could elect to use “quality tiering”—voluntarily receiving performance-based penalties and bonuses, ranging from a penalty of 1 percent to a bonus of nearly 10 percent based on quality and cost performance tiers. Of the 636 practices that reported performance data, those that elected quality tiering and those with high use of electronic health records [defined as those practices whose clinicians had above-average attestation rates for Stage 1 of the meaningful use program), had better performance on quality and costs than other practices. Practices with a primary care focus had better quality than other practices but similar costs, the researchers found.
Since the VM program’s first year, it has continued to grow, expanding to include physicians in practices with 10 or more eligible professionals in payment year 2016 and mandating quality tiering for all large practices (those with 100 or more eligible professionals). In addition, the penalty for failing to report increased to 2 percent. Now, in 2017, the Value Modifier program includes all physicians regardless of practice size, requires quality tiering for all practices with 10 or more eligible professionals, and increases the penalty for failing to report to 4 percent. Potential incentives have also increased from a maximum of two times the factor in 2015 and three times in 2016 to four times in 2017 for the practices with the highest quality and lowest costs, the researchers explained.
The researchers concluded that with the penalty for not reporting up to 4 percent this year, “it is increasingly unlikely that it will make financial sense for practices to decline to report, and it is even more important for smaller practices to be supported so they can do so—since they may be less able than larger practices to bear this degree of financial risk.”
The researchers importantly stated in their study, “As physician payment shifts from volume to value, it is important to understand patterns of participation and predictors of success and failure.” As such, they added that it is likely that lessons from this work can be applied to MIPS, though they do note some key differences between the two reporting programs. For one, the MIPS cutoffs are different— the low-volume threshold for MIPS exemption remains 200 Medicare patients, and the Medicare reimbursement threshold is $90,000 in Part B billings for 2018; the exemptions for this year were 100 Medicare patients and $30,000 in Part B allowed charges.
To this end, the researchers stated, “Large practices that provide little direct patient care (such as radiology or pathology groups) may have been eligible for the Value Modifier program but might not meet volume thresholds in the [MIPS] system. Conversely, smaller practices that have a high proportion of Medicare primary care visits might meet the [MIPS] system’s volume thresholds though they did not meet the Value Modifier program practice size threshold.”
Further, there are methodological differences between the programs as well: For example, the VM program uses a statistical threshold to determine whether practices meet “high” or “low” quality or cost designations, while the MIPS will assign scores along a continuum and not use statistical thresholds to assign performance categories, the study stated.
Taking a step back and looking at what we know about MIPS so far, it’s quite possible that no significant conclusions will be gained from year one (2017). That’s because the government made the first year a “pick your pace” transition year, in which participants simply had to submit data on one quality measure for one patient to avoid a penalty.
But in 2018, the stakes will be raised. According to a final rule released last month, although there are plenty of ways clinicians can be exempt from the program once again, for those who are participating, the thresholds are far tougher than they were this year and could prove challenging. Considering that many clinicians likely took the route of “submitting the minimum amount of data” for 2017, they will need to prepare in much different ways to succeed in 2018.
This then begs the question, will clinicians in this program “opt out” from reporting data as so many did in the Value-Based Payment Modifier program? As you might expect, that answer will depend on the penalties handed down by the government. For the 2018 performance year, the maximum penalty would be a 5 percent negative hit to a doctor’s Medicare Part B payment adjustment, but that number increases to 7 percent in 2019 and a whopping 9 percent in 2020.
With this in mind, a key point made by the researchers in the Health Affairs study was that it doesn’t make financial sense to decline to report when the negative payment adjustment hit is this high—compared to the 1-percent penalty early on in the VM program. And to this end, smaller practices that are participating must be equipped with both the technology and workforce infrastructure to be able to avoid MIPS penalties. If they aren’t, the penalties for failing to report could be a prerequisite to the greater fear that MACRA could force some small practices out of business.
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