Using Quality and Cost to Determine Value

I am explaining MIPS, the Merit-Based Incentive Payment System. Although MIPS does not begin until 2017, 85% of the MIPS score is derived from performance in the 2 quality programs that clinicians should already be engaged in: Meaningful Use of an EHR (MU) and the Physician Quality Reporting System (PQRS).

CMS will use performance on PQRS to determine the quality of care provided to patients. It will use the cost of the care provided to those patients (sometimes called “resource use”) to establish where an individual clinician falls in relation to peers in the “Quality and Cost Performance Spectrum.” Imagine that there are 4 quadrants in the value world as depicted in Figure 3 below: low quality/low cost; high quality/high cost; low quality/high cost (this is the worst category to be in); and high quality/low cost (the best category to be in with regard to “value”). As I explain the cost calculations, it is apparent that the current methodology captures little or no wound care related costs, and as a result, will incorrectly attribute our role in generation of charges for any given patient. This means that the wound care clinician can take the “blame” for high cost care, but under the current model, do nothing to improve it, because the current model doesn’t look at the charges we generate. For the time being, we have no control at all over the way CMS calculates the “cost” part of this equation. The only thing a wound care clinician can control is his or her quality performance.

Figure 3: The 4 Quadrants of the Value World


Low Quality/Low Cost

(bad PQRS score)


High Quality/Low Cost

(good PQRS score)


Low Quality/High Cost

(bad PQRS score)


High Quality/High Cost

(bad PQRS score)

Figure 4 below is a graph from a Quality and Resource Use Report (QRUR). The scatterplot depicts the range of provider performance on a suite of quality measures, and the cost of care amount those patients. I have placed a red diamond in the section of the graph that would represent high quality   (high PQRS scores) in conjunction with low cost care. A provider who scored in this range would likely realize a bonus payment under MIPS. However, to really make sense of the figure below, we need to spend some time reviewing a QRUR report in detail.

Figure 4: Scatterplot of Providers in relation to Quality and Cost (red diamond indicates a theoretical ideal position for an individual provider).



Stay tuned each week as this topic “MIPS and the Quality Resource and Use Report” continues.

Until then, Do the Right Thing!™

Caroline Fife, MD

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