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Issue Brief: ACO Participation Can Increase MACRA Performance Scores

March 30, 2017
by Heather Landi
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With the first performance year for the new Merit-Based Incentive Payment System (MIPS) underway, eligible clinicians must strategize payment implications under the program. According to a new issue brief from Caravan Health, participating in a Medicare Shared Savings Program accountable care organization (ACO) could potentially help physicians earn up to a 25 percent positive Medicare payment adjustment in 2018 under the Medicare Access and CHIP Reauthorization Act's Merit-based Incentive Payment System (MIPS).

Caravan Health, a Kansas City-based population health management company, examined the impact of ACO participation on MIPS payments for all eligible clinicians.

According to the issue brief, unlike the Physicians Quality Reporting System, Meaningful Use and the Value-Based Modifier, MIPS places the performance of each clinician on a curve, and adjusts payments based on their precise location in the distribution compared to others.

In the issue brief, titled “Impact of ACOs on MIPS Payments for All Eligible Clinicians,” Lynn Barr, CEO of Caravan Health, and LeeAnn Hastings, Compliance Officer for 23 Medicare Shared Savings Program ACOs, compare MIPS payment adjustments of ACO participants versus non-ACO participants.

“The brief illustrates that Medicare Shared Savings Program (MSSP) participation will enhance MIPS performance and increase the likelihood of receiving the exceptional performance bonuses. Exceptional performance bonuses are only available the first five years of MIPS and, depending upon the number of exceptional performers, could receive up to ten percent in addition to the maximum positive payment adjustment, which is up to three times the penalty for the first five years of the program,” Barr and Hastings wrote in the brief.

“Taking into account the Centers for Medicare & Medicaid Services’ (CMS) scaling factor and the exceptional performance bonus, a top-performing practice could theoretically earn up to a 25 percent payment adjustment in the 2018 performance year,” Barr and Hastings wrote.

 According to Hastings, “MACRA requires that 30 percent of the MIPS score is based on Resource Utilization. Track 1 ACO participants, however, are held accountable for cost in their ACO and not MIPS. As a result, Track 1 ACO participants can more easily achieve high scores compared to other MIPS participants, increasing the likelihood of avoiding MIPS penalties and earning the exceptional performance bonus.”

 To predict MIPS bonuses, Barr emphasizes that clinicians must know both their performance score and estimate the score of the rest of the providers in the MIPS pool. Up to 40 percent of eligible clinicians in the pool are expected to be participants in Track 1 Medicare Shared Savings Program ACOs. Those ACOs will receive special scoring causing most other MIPS-eligible clinicians to receive lower adjustments in comparison, she stated.

“High performing MIPS participants with average costs will score 15 percent lower than equivalent MIPS participants that are in a risk-free Track 1 ACO and may find it difficult to earn the exceptional performance bonus. High performing MIPS participants with high costs will score 30 percent lower than equivalent MIPS participants that are in a risk-free Track 1 ACO and may face MIPS penalties. Hospitals can avoid hundreds of thousands of dollars in downward MIPS adjustments, and potentially earn the exceptional performance bonus by enrolling in an ACO to take advantage of special scoring for their clinicians,” the authors wrote.

“Small practices should consider joining an ACO to avoid penalties for generally lower scores due to lack of infrastructure, and providers in rural areas may want to join ACOs to avoid MIPS penalties due to their higher cost structures. Community hospitals can earn high bonuses and support their community physicians, particularly specialists, by enrolling them in their ACO, protecting their incomes and reducing their administrative burden,” Barr wrote.

 The full brief can be viewed here.

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