Part 2: MIPS and VBP “it was the best of times, it was the worst of times.”

November 10th, 2016 by Rod Baird

Apologies for describing these two CMS programs by using the words of Charles Dickens – but they fit exactly.

The Best of Times – the CMS’s revisions to MACRA/MIPS regulations suspends the worst aspects of VBP and opens the door to avoiding all penalties for LTPAC Medicine in 2019, based on 2017 behavior.

This is the second, and final installment, of a survey of VBP and MACRA/MIPS. Today we focus on MIPS.

As dismal as our future was under VBP, CMS acknowledged that certain medical groups serve high-cost/high-risk patient populations.  Further, they agreed that some of their risk-adjustment methodologies must be corrected. What policy changes does that actually translate into? Here is a high-speed review of the significant changes to MIPS from the draft rule, which we covered in a series of webinars this summer:

Our Key Conclusion:

  • The headline for the final rule should read – ‘The Principal [CMS] announces everyone who turns-in any signed/dated homework will automatically earn passing grade for 2017 year – still encouraging everyone to carry 18 semester hour course load and do extra credit during holiday break’.[i]
    • Yes, to fully participate in MIPS in hopes of receiving incentives, and possible bonuses – larger medical groups would still have to complete 6 quality measures, up to 4 Clinical Practice Improvement Activities, 5 core EHR activities, and up to 11 advanced EHR performance exercises.
    • Alternately, groups can avoid MIPS penalties by documenting participation in a single activity for just 90 days.
      • CMS estimates that 90% of all Practitioners subject to MIPS will successfully meet or exceed the minimum reporting levels, and avoid penalties.
    • Lower hurdles reduce the size of performance incentives. Why? MIPS is basically budget neutral – that means the incentives are fueled by the penalties imposed on Practitioners who failed to meet the thresholds for reporting. In the draft rule, 50% of all practitioners were going to receive penalties; those forfeitures would be redistributed to the groups who were in the top 50% of participants.  With the losers being reduced from 50% to just 10% of the participants – the available prize money was also cut by 80%.  Those funds will be distributed across the 90% of providers who avoided penalties; that distribution is based on a competitive scoring program. To be high performance will require considerable effort, but for a significantly lower possible payoff. The old model – one loser, one winner.  The new model – 1 loser, 9 winners.

Regardless of the reduced incentive for full participation, the 2017  specifications are likely to be relatively unchanged for the 2018 Performance Year.  It is critical for your future success to understand the mechanics and use 2017 for planning and testing – in 2018 CMS expects to terminate the lower performance thresholds and raise penalties for non-participation from 4% to 5% as previously announced.

  • The biggest change – Resource Use in suspended from MIPS entirely for 2017 scoring. The draft rule weighted Resource Use (i.e. Cost) at 10% of our total score.  Your protests were heard – CMS is going to re-work its Resource Use Measures to improve their Risk Adjustment for Practitioners who serve very high cost patients (e.g. LTPAC residents).  It is incredibly important to devote 2017 to advocating for revisions to CMS Risk Adjustment calculations appropriate to LTPAC residents (this applies to both MIPS and APM programs).  In 2018 Resource Use starts @ 15% of total score.
  • The Final Rule excludes SNF Encounters from the definition of Primary Care. This was proposed in the draft rule, but it is a big ‘win’ for LTPAC medicine.  Those SNF patients have very high costs, and 30-day all cause rehospitalization rates that are significantly above the averages for ambulatory PCP groups – this was a double penalty.  These Post-Acute Care (PAC) patients are high cost, and their Rehospitalization Rates are also part of a CMS Quality Measure (calculated from Claims) CMS-3 (30 day all cause rehospitalization rates). This QM was a big factor in low Quality performance scores for LTPAC Medical Groups.  Now those SNF patients won’t be counted at all in your rehospitalization scores.  Only SNF patients who stay in the building and convert to POS 32 (LTC) are likely to be attributed to you.
    • Unless these SNF patients started as a LTC resident in you practice, then go to Acute Care, return to PAC, then get rehospitalized – as a LTC Practitioner you should have significantly improved CMS-3 scores.
  • The Final Rule eliminated two additional CMS calculated Quality Measures:
    • CMS-1 – Acute Conditions Composite Hospitalization Rate (annual). This calculated the hospital rate of your attributed patients – this included all your POS 31 attributed patients, and any of your LTC residents who required a hospitalization for Bacterial Pneumonia, UTI, or Dehydration.
    • CMS-2 – Chronic Conditions Composite Hospitalization Rate (annual). Same as CMS=1 but focused on Diabetes, COPD, and HF.

The elimination of CMS-1 and CMS-2, combined with shedding attribution of SNF patients should materially reduce the quality score penalty we inherit when caring for a LTPAC Population.  If you are a gEHRiMed™ user, we’ll cover this in an upcoming webinar giving our recommendations for MIPS 2017 management strategies.  Otherwise we recommend practitioners prepare a careful study of the rules – they are typically complex and with  more options than ever before.

CMS made other sweeping revisions – the most far reaching was in terms of the number of affected practitioners.  They accommodated protests by setting a Low Medicare Volume Exclusion test.  Practitioners whose Medicare Part B payments are below $30,000 are exempt from MIPS for 2017.  This exemption is unlikely to apply to any LTPAC Medical group where nearly every patient is covered by Medicare B or C.

Within MIPS there were major program adjustments which effectively lowered complexity and difficulty.  The Rule offered three possible methods of successful MIPS Participation:

  1. Test the Waters – groups that demonstrate the slightest willingness to acknowledge MIPS (earn 3 points out of the 100 available) will avoid any penalty. The Final Rule describes multiple options to satisfy this minimal level of engagement – this means reporting one quality measure, one improvement activity, or only four advancing care information measures.
  2. Partial Participation – EC’s or groups who submit 90 days of 2017 data for all three categories (quality, advancing care information and clinical practice improvement activity) to Medicare, may earn a neutral or small positive payment adjustment in 2019.
  3. Full Participation – Some well organized groups are likely to have programs in place that will allow complete success under MIPS. Those groups probably earned VBP bonuses for 2015 and 2016, and will have lower incentive payments under the final MIPS rules because only 10% of groups are expected to receive negative payment adjustments.  (A $500 Million bonus pool is available for groups that score >70 points which will be an inducement for currently high performing groups to continue their winning strategies).  We doubt groups that aren’t already highly organized will find the effort required for a full year’s participation cost to be justified.

Scoring Quality, Advancing Clinical Information, and Clinical Practice Improvement:

  • The Three MIPS Categories each became easier to successfully report:
    • Quality: In addition to the elimination of the two CMS calculated Quality Measures for Hospitalization Rates, the frequency of patient reporting decreased. In the absence of Resource Use, the Quality domain is increased to 60% of the total MIPS composite score; it drops to 50% in 2018.
      • In the final rule, CMS established that for full performance, clinicians will report on six quality measures, or one specialty-specific or subspecialty-specific measure set. A lower threshold of one measure out of six applies for CY 2017.
      • A 50% minimum reporting rate is the new standard. In the draft rule individual or groups had to report on 80 or 90% of all eligible patients.  This will give participants significantly more leeway in rolling-out their 2017 Quality Reporting strategies.
      • There is a ‘test the program’ option to avoid penalties – simply report your measures
    • Advancing Care Information (the program formerly known as Meaningful Use) reporting is significantly less problematic under the final MIPS rule than the draft’s proposal. The number of specified activities needed to satisfy the base reporting requirements for 50% of the category’s score dropped from 11 to 5.  Other adjustments in scoring increased the possible pathways to achieve a maximum score.  The actual burden on LTPAC groups will still be significant, but much lower than under MU.
      • Medicaid MU – despite multiple requests to align Medicaid MU standards with ACI under MIPS, CMS rejected those pleas. LTPAC medical groups that are seeking to receive Medicaid MU payments @ $8,500 for program years 1-5 must report to Medicaid for MU and Medicare for ACI.
      • Medicare ACI Hardship Exemptions – LTPAC medical groups are likely to remain eligible for hardship status under MIPS’ ACI category. Groups should model their expected MIPS scores to evaluate the wisdom of this strategy. If you’ve ever earned Medicaid MU payments, ACI is probably going to seem relatively simple.
    • Clinical Practice Improvement (CPI) – the final rule lowered the threshold for successful reporting for groups of all sizes. Small groups (14 or fewer) report one or more activities, and large groups (15+) report four medium-weighted or two high-weighted activities The actual amount of work groups must undertake to satisfy these requirements won’t be known until the CMS publishes specifications for the 90+ CPI activities they name in the regulation. Reporting of certain CPIA’s that are aligned with ACI objectives will award eligible clinicians bonus points in the ACI performance category, thus paving additional pathways for maximization of the ACI score.

Our overall assessment of the revised MIPS final rule is that LTPAC medical groups should be certain to report on several quality measures, at least one CPIA, and test their ability to meet the five basic ACI criteria.  We’ve seen multiple failures for groups executing a PQRS strategy – so it is key to be certain you understand these highly complex reporting mechanisms – use this ‘practice & testing’ year wisely.

A significant majority of your practice’s revenue is derived from Medicare beneficiaries, it should be rewarding to get a head start on 2018 while everyone else is taking a MIPS holiday.


[i] The balance of this blog simplifies a 2,398 page rule into a few easier to comprehend thoughts – it is not a substitute for a thoughtful assessment of the entire MACRA/MIPS regulation.


Rod Baird

About Rod Baird

Rod Baird is the Founder and President of Geriatric Practice Management (GPM). Since 1977, he’s led provider and management organizations that deliver care to Medicare/Medicaid beneficiaries. Past programs he’s overseen include home health, personal care, hospice, rehabilitation hospitals, adult and psych daycare, alcohol/drug rehabilitation, industrial medicine and primary care practices. The Centers for Medicare and Medicaid Services (CMS) selected Baird as one of only 73 individuals to serve with its InnovationProgram. His educational background includes a Master’s Degree in Physical Chemistry from the American University, Washington, D.C.

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