The Medicare Quality Payment Program Part I: An Overview of MIPS and 2018 Updates

Douglas Schoeneman


Aegis Compliance & Ethics Center, LLP

The Medicare Quality Payment Program Part I: An Overview of MIPS and 2018 Updates

In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (“MACRA”) which abolished the much-despised Sustainable Growth Rate (“SGR”) payment formula for providers. Continued use of the SGR required annual “doc fixes” to prevent a reduction in provider payments. MACRA replaced the SGR with two new provider payment tracks: (1) the Merit-Based Incentive Payment System (“MIPS”) and (2) the Advanced Alternative Payment Model (“AAPM”). Both payment tracks rolled out in 2017 and, as the first reporting year nears an end, the Centers for Medicare and Medicaid Services (“CMS”) has published a list of changes and additions to both in its Final Rule with Comment Period for 2018 (82 FR 53568). Part I is an overview of MIPS and the changes and additions effective January 1, 2018.

The Merit-Based Incentive Payment System (MIPS)

MIPS consolidates three existing CMS reporting measures: (1) Quality; (2) Cost; (3) Advancing Care Information (“ACI”), while adding a new performance category, Improvement Activities (“IA”). MIPS eligible clinicians report to CMS via Medicare Part B claims, a Qualified Clinical Data Registry (“QCDR”), a Qualified Registry (unlike a QCDR, a Qualified Registry is restricted to reporting only CMS approved performance measures), the CMS Web Interface (for groups with at least 25 eligible clinicians), or the CAHPS for MIPS Survey.  Scores from the four categories are combined to reach a final score (0 to 100) that is compared against a threshold score. The final score determines physician payment adjustments – positive or negative. In 2017 failure to report anything resulted in a score of 0 and a 4% payment penalty starting with payment year 2019 (payment adjustments reflect clinician performance two years prior). Reporting at least one measure results in no penalty and reporting all measures could result in a positive payment adjustment, as well as a bonus for exceptional performance.

Changes and Additions to MIPS Effective in 2018

Exclusion: The exclusion threshold changes from a group having ≤ $30,000 in Medicare Part B allowed charges or ≤ 100 Part B beneficiaries to ≤ $90,000 allowed charges or ≤ 200 beneficiaries. By raising the threshold for Part B charges to $90,000, CMS estimates the number of eligible clinicians subject to MIPS reporting requirements in 2018 will be 600,000 – about 40% of all clinicians who bill Part B.

Virtual Groups: CMS allows virtual groups, made up of solo practitioners and groups of 10 or fewer eligible clinicians who come together “virtually” to participate in MIPS. Solo practitioners and small groups still need to exceed the low-volume threshold. While virtual groups do not make ineligible clinicians eligible they may provide an opportunity for eligible clinicians to improve their final scores, resulting in a positive payment adjustment in 2020.

Scoring: The minimum final score needed to avoid a penalty rises from 3 in 2017 to 15 in 2018 and the payment adjustment rises to ±5% (and ±7% in 2019, ±9% thereafter). The additional performance threshold stays at 70. In 2017, CMS set the Cost category at 0% of the final score but it rises to 10% in 2018 (and 30% thereafter). The percentage of the final score allocated to Cost is taken from the Quality category meaning Quality in 2018 is weighted at 50% of the final score (and 30% thereafter).

Payments: An eligible clinician exceeding the additional performance threshold receives an additional “exceptional performance bonus” of up to 10% (unless reauthorized by Congress, this bonus will expire after 2024). By law CMS must maintain budget neutrality, so payment penalties will roughly equal positive adjustments. This means that in years when payment penalties exceed positive payment adjustments, those penalty savings are re-allocated to the eligible clinicians receiving positive adjustments – up to three times the payment adjustment (i.e. an exceptional performer in 2018 could receive in payment year 2020 the maximum 5% adjustment x three + the 10% bonus = 25% total payment adjustment).

Special Bonus Categories: (1) Eligible clinicians can add an extra five points to their final score by treating “complex patients.” Generally, a complex patient requires more resources and clinician time and, even with the additional resources, have worse outcomes than less complex patients. CMS takes that into consideration; (2) eligible clinicians part of a small practice (15 or fewer eligible clinicians) may add five points to their final score so long as the group reports on at least one performance category; (3) eligible clinicians who use 2015 CEHRT (Certified Electronic Health Record Technology) can boost their ACI score by 10% (not their final score for all performance categories).

Complying with the Final Rule

CMS believes that eligible clinicians and who reported performance to CMS under PQRS (Physician Quality Reporting System) and Meaningful Use now have a smaller reporting burden. While CMS did receive stakeholder comments applauding CMS for its efforts, others stressed the complexity of complying with MIPS – in particular the changes in 2018. Regardless, CMS is going forward and eligible clinicians coming into MIPS in 2018 need to train up on its requirements, make any alterations to auditing and monitoring, and update their policies and procedures.


This is the first of a two part series on the Medicare Quality Payment Program.






Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s