Making Sense of MIPS

By Adria Schmedthorst  |  March 24, 2016

By now, most providers have heard of the Merit-Based Incentive Payment System (MIPS) that was signed into law in April 2015. MIPS is a quality and performance improvement program that will roll three current Medicare programs—Physician Quality Reporting System (PQRS), Meaningful Use (MU) program, and the Value-Based Payment Modifier (VBPM)—into one.

Although MIPS is slated to begin in 2019, the two-year look-back period used by the Centers for Medicare and Medicaid Services (CMS) will make 2017 the first performance year for MIPS. That means you must use the months ahead to make sense of the new program and prepare to take advantage of the incentives and avoid the penalties.

To get a sense of the importance of being ready for this new reimbursement model, here is a look at the financial impact MIPS will have on you. Tweet this Kareo story

  1. Along with Alternative Payment Models (APMs), MIPS will redefine how $250 billion per year in Medicare Part B payments will be paid to physicians in a value-based rather than fee-for-service based manner.
  2. High-performing providers will be rewarded with up to and even beyond 27% of Part B payments. 3. Low-performing providers will be penalized up to 9% of Part B payments.

Eligible professionals for the first two years of MIPS will include physicians, PAs, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists. To participate in MIPS, providers must meet a volume threshold of a minimum number of Medicare beneficiaries, items or services, and/or allowable charges.

Reimbursement will be based on an annual scoring system with each provider’s MIPS score determined by four performance categories including meaningful use of EHRs, quality, resource use, and clinical practice improvement.

These categories will be weighted as follows for 2017:

  • MU of Certified EHR Technology: 25 points
  • PQRS/VBM: 50 points
  • VBM Cost: 10 points
  • Clinical Practice Improvement: 15 points

The number of points awarded in these categories will change beginning in 2019 but it is important to note that for at least the first two performance years, 75% of a provider’s scores will come from Meaningful Use and PQRS/VBM, two categories that many providers are already focused on.

The way that the scoring system works is that based upon their composite, each provider will receive a score ranging from 0 to 100. CMS will annually define a threshold of performance such as 50. Providers with a score of 50 would not be subject to Medicare Part B adjustments while providers with scores above or below 50 would either earn incentives or receive penalties respectively.

MIPS adjustments are meant to be budget neutral, so we can expect an equal number of positive and negative reimbursement changes. Yet, there is good incentive given to the highest performers as MIPS is offering up to three times the maximum positive adjustments to these providers. Also, for the years 2019-2024, a $500 million bonus pool will provide additional incentives for up to 10% of what the law calls “exceptional performers”.

In addition to the effect a provider’s MIPS score will have on their reimbursements, these scores will also be reported on the CMS Physician Compare website. This will allow consumers to view ratings and select providers based upon their perceived quality of care and value.

MIPS has yet to be finalized and there will be even more changes to come in the next few months. MU performance and PQRS reporting are categories that CMS has hinted could see major modifications. Despite this uncertainty, one thing is sure and that is that MIPS is on its way and you must begin preparations for this massive change in Medicare Part B reimbursements now.

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