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Nitor Infotech Blog
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MIPS (Merit-based Incentive Payment System): New Incentive sSructure to Revolutionize US Healthcare

MIPS leverages PQRS, Value-based modifier, and meaningful use rules. It applies to Medicare Part B providers.

The MACRA (Medicare Access and CHIP Reauthorization Act) has made three important changes to the Medicare incentive program for providers. These changes create a Quality Payment Program (QPP):

  • This change marks the end of Sustainable Growth Rate (SGR) method for determining Medicare payments.
  • New framework for healthcare providers involves rewarding incentives for care and not on claims, in other words quality is important than the total number of claims in a year
  • This will be a combination of all three programs (PQRS, VBM, MU) into a single program (MIPS)

CMS provides you two options to choose from (Either MIPS or APM- Advanced Payment Model) for reporting quality measures.

The program will commence from 2016 and will stretch to 2021 and beyond. Reporting will start from 2017 and payments will start from 2019.

What is the Merit-Based Incentive Payment System (MIPS)?

As mentioned above, MIPS combines PQRS, Value-based Modifier, and Meaningful Use measures into one single platform for eligible professionals:

MIPS defines four categories of eligible clinical performance:

  1. Quality (50%)
  2. ACI -Advancing Care Information renamed from MU- Meaningful Use (25%)
  3. CPIA – Clinical Practice Improvement Activities (15%)
  4. Resource use (10%)

Eligible professionals for first two years of reporting are as follows:-

  • Physicians
  • Physician Assistants
  • Certified Registered Nurse Anesthetists
  • Nurse Practitioners
  • Clinical Nurse Specialists
  • Groups that include such professionals

MIPS payment model is budget-neutral. Total upward and downward adjustments will be balanced so that average change is zero. In other words, one person’s loss will be another person’s gain, and total incentives paid and total penalty levied will be balanced. CMS calculates to set the total MIPS incentive pool in dollars equal to the total MIPS penalties assessed to keep the program budget neutral.

MIPS performance measurement will begin from January 1, 2017. There is no potential end date for MIPS.

The performance threshold is determined annually as the mean or median of the MIPS scores for all EPs in a prior period as selected by CMS. For the initial two payment years (2019 and 2020), the PT will not be based on historical MIPS scores but rather on a combination of historical performance on measures and activities related to PQRS, MU, VBM, and possibly other factors as determined by CMS.

What are Alternative Payment Models (APMs)?

APM is an alternate model for giving incentives to Medicare providers for care they provide to Medicare patients:

  • Under APM, providers will be paid a lump-sum incentive of 5% from 2019 to 2024
  • This program will based on patient-centered care
  • From 2026, higher incentives will be provided to participating providers

Accountable Care Organizations (ACOs), Patient-Centered Medical Homes, and bundled payment models are some examples of APMs.

Participation in above two programs can be as an individual provider or group.

Financial Impact of MIPS:-

MACRA defines two types of financial impacts for clinicians participating in MIPS:

  • A small, annual inflationary adjustment to the Part B fee schedule
  • MIPS payment adjustments (incentives or penalties) based on the MIPS 100-point Composite Performance Score (CPS)

The potential MIPS incentives and penalties via payment adjustments are much more substantial than the inflationary adjustments.

As CMS estimates that approximately half of all MIPS eligible clinicians will earn an incentive for the first performance year, and the other half will be assessed a penalty. There is an additional “exceptional performance bonus” that escalates up to 10% for progressively higher performers within the top ~30% for high-quality patient care and good patient engagement.

Do reach out to us to learn more about our services.

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