Breaking down MIPS – Part 2: Cost category

MIPS CostWhen it comes to the Quality Payment Program (QPP) and moving Medicare Part B clinicians to a performance-based payment system, most practices know by now that there are 2 tracks to choose from—Advanced Alternative Payment Models (APMs) or the Merit-Based Incentive Payment System (MIPS).  For 2017, MIPS has 4 performance categories, weighted as follows:

This blog post will focus on MIPS and the cost performance category.


Let’s review the basics of who can participate in the QPP. To qualify for the QPP you must bill more than $30,000 to Medicare Part B and provide care for more than 100 Medicare patients per year.  If you decide to participate in MIPS, you may earn a performance-based payment adjustment.

For MIPS you must also be a:

  • Physician
  • Physician assistant
  • Nurse practitioner
  • Clinical nurse specialist
  • Certified registered nurse anesthetist

You cannot participate in MIPS if:

  • You are newly enrolled in Medicare (2017 is your first year participating)
  • You are below the low-volume threshold
  • You participate in an advanced APM

You can choose to report as an individual or group. If you choose to report as a group, that means there are more than 2 clinicians whose individual NPIs have reassigned their billing rights to a single Tax Identification Number. Your data get aggregated and sent as the group.

The first performance period began January 1, 2017 and closes December 31, 2017. To potentially earn a positive payment adjustment under MIPS, you must send in data about the care you provided and how your practice used technology in 2017 to CMS by March 31, 2018 for a payment adjustment in 2019. If you have not yet gotten started, it’s time to pick your pace.

Understanding cost measures

The cost category of MIPS comprises 0% of your score during this first year of the QPP. During this transition year, CMS is looking at costs and will give you feedback on how you performed, but the category is not going to be tied to your 2017 reimbursement. It is the only MIPS category that requires nothing from you at this time—CMS will get all the information it needs from the claim data that it is already receiving.

That doesn’t mean you should ignore this category all together. In 2018 cost will be used to determine your payment adjustment. So it’s time to familiarize yourself with the measures. CMS will be giving you feedback.

The cost measures that CMS is using for the first year are not brand new. They are derived from the value-based modifier program and Quality of Resource Use reports.  CMS drew from those reports and the MIPS measures that it has spent years developing to get a sense of how they work, to start giving clinicians feedback, and then to transition them into the new MIPS program.

MACRA Cost categoryA cost measure represents the Medicare payments (for example, payments under the Physician Fee schedule, Inpatient Prospective Payment System, etc.) for the items and services furnished to a beneficiary during an episode of care. The episode of care is the basis for identifying items and services through claims that are furnished to address a condition within a specified timeframe.

The measures assessed

In this first year, CMS will give feedback on 12 cost measures. Two of the 12 are general cost measures that capture the breadth of what clinicians do:

  • The Medicare Spending per Beneficiary (MSPB)
  • The total cost of care measure

The other 10 measures are episode-based cost measures:

  • Mastectomy
  • Aortic valve surgery
  • Coronary artery bypass graft (CABG)
  • Hip femur fracture or dislocation treatment
  • Cholecystectomy and common bile duct exploration
  • Colonoscopy and biopsy
  • Transurethral resection of the prostate for benign prostatic hyperplasia (BPH)
  • Lens and cataracts procedures
  • Hip replacement or repair
  • Knee arthroplasty or replacement

CMS is currently trying to further determine how to have the episode-based cost measures reflect the type of care clinicians are providing and what they find most meaningful.

Providing actionable information

The cost measures require 5 essential components:

  1. Defining an episode group (aortic valve replacements, mastectomies). There are 3 types:
    1. Chronic condition episode groups
    2. Acute impatient medical condition episode groups
    3. Procedural episode groups
  2. Assigning costs to the episode group (direct costs, such as for carpal tunnel surgery and the associated surgeon’s fee, materials and anesthesia; and indirect costs, like if your patient keeps getting readmitted to the hospital)
  3. Attributing the episode group to one or more responsible clinicians
  4. Risk adjusting episode group resources or defining episodes to compare like beneficiaries
  5. To the extent possible, aligning episode group costs with indicators of quality

The goal for developing cost measures is to provide clinicians with useful, actionable information that can help to drive lower costs and improve patient outcomes. CMS received stakeholder feedback on this cost category through April 2017, and will finalize everything shortly thereafter.

Are you ready? We are!

Quanum EHR is fully certified for the QPP based on 2014 Edition Certification and the associated CMS regulatory requirements. The QPP requires EHRs to advance to the 2015 Edition Certification by 2019, and Quanum EHR will be ready for that deadline. The Quanum EHR solution is prepared to support your practice with MIPS in 2017 and beyond. Read our MACRA brochure to learn more.

For more information on how the Quanum EHR can help you report, call 1.888.491.7900, or read our white paper, “3 things to know about making the EHR switch.”

Source:  CMS

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