New Cars, Fiscal Cliffs, Mothers-in-Law & MIPS

My Dad’s definition of mixed emotions was watching your mother in law drive off a cliff in your new car. (Truth be told, his mother in law adored him and vice versa.)  There’s a lot of back and forth about the Merit-based Incentive Payment System (MIPS), and it’s hard to decide whether it’s good news or bad news. As usual, the way to figure this out is to follow the money. I’m bringing this up because the House Energy & Commerce Health Subcommittee plans to hold a hearing soon on MIPS. I previously blogged about the MedPAC letter about MIPS. Whether an organization is for it or against it depends on whether they think their members will make or lose money on it. Because there are a lot of physicians still floating down the Denial River – I will review the facts:

In 2015, Congress passed MACRA with rare bipartisan support (The Medicare Access and CHIP Reauthorization Act of 2015), to avoid a looming 25% cut in Medicare physician payment (otherwise known as a fiscal cliff) under the Sustainable Growth Rate formula .

MACRA created the Quality Payment Program (QPP) that:

  1. Repealed the Sustainable Growth Rate formula (which would have cut doc pay by 25% in 2015)
  2. Hopes to transition provider Medicare Part B payments to reward value over volume
  3. Streamlined multiple quality programs (e.g. PQRS, Value-Based Payment Modifier, and MU) under the new Merit-based Incentive Payment System (MIPS)

Every doctor in the US that accepts Medicare is subject to MACRA, EXCEPT for the ones who get exempted – and that is a moving target (see below).

There are 2 ways doctors participate in MACRA – either by participating in alternative payment models (APMs) or MIPS. Doctors who receive a significant portion of their payments from APMs get a 5% bonus on all of their Medicare Part B revenue. MIPS pays bonuses or charges penalties to a providers’ part B payments, depending upon performance.

Congress included a delay in MIPS implementation in the recently passed budget law. The American Medical Association (AMA) lobbied hard for this delay. Previously, 2018 was the last year for which CMS could choose the score that physicians must receive to avoid MIPS penalties. Next year, the score that physicians needed to achieve in order to avoid penalties was supposed to increase significantly. However, the new budget law will delay implementation of that higher threshold through the fifth year of the program. Some large multispecialty provider groups such as those represented by the American Medical Group Association (AMGA), opposed delaying MIPS. Why?

MIPS was always meant to be temporary. The long term plan is to get all providers into APMs. APMs are supposed to be the more lucrative option. However, depending on how it is implemented, providers could make more money in MIPS — maybe a lot more money. It was not widely publicized that a handful of large group practices actually made 147% of Medicare Part B under PQRS (the Physician Quality Reporting System). That means some doctors drove away from Medicare’s fiscal cliff in a new car. It was theoretically possible to make 122% of Medicare Part B payments under MIPS (12%  maximum bonus plus 10% for the exceptional performers). The problem with the APM model is that the 5% APM bonus is based on the previous year’s Part B charges and it doesn’t raise physician’s baseline pay each year. That’s why some large physician groups prefer MIPS.

The Obama CMS slowed MIPS implementation in 2017 because there was so little time to prepare for it after the rule was finalized. The delay in implementation allowed more doctors to avoid MIPS penalties. MIPS is budget neutral, which means the penalties paid by some doctors are what fund the bonuses of the high-performing doctors. When fewer doctors pay penalties, bonuses are smaller. In the 2018 QPP final rule, CMS tripled the low-volume threshold for participation. By some estimates, only 37% of clinicians who bill Medicare will be required to participate in MIPS. This could make the 2018 bonuses smaller than anticipated for the highest performers. However, that will change in 2019.

Who is exempt from MIPS in 2018?

Physicians are required to take part in MIPS if they treat 200 or more Medicare beneficiaries in a year or bill Medicare $90,000 or more in allowed charges. CMS estimates that 90% of clinicians in practices of 1-15 members, and 97% of clinicians in all practices will receive either a neutral or positive adjustment in 2020. The problem is that the positive adjustment may not be as high a percentage as it could have been if more penalties had been paid by others.

The AMA lobbied Congress hard to make 2018 another transition year under MIPS, to get the increase in the low volume patient threshold, and to get bonus points under MIPS for treating complex patients. The bonus points for treating complex patients is something that will be good for wound care practitioners since we call “treating complex patients” a typical day in the clinic. However, CMS has warned that MIPS requirements will get tougher in 2019 due to the requirements recently enacted into the budget law.

The AMA is concerned that CMS is moving forward in 2018 with the cost category. I talked about what will happen as cost becomes part of the MIPS calculations in a previous post.

The AMA is concerned about both the weighting and the cost measures that CMS will use, which it believes are deeply flawed. It’s these cost calculations that could be the beginning of the end for the field of wound care as we know it. We could be getting ready for these cost calculations and helping CMS improve them, but we aren’t.

The take home message for wound care practitioners and manufacturers

Some wound care practitioners will be exempt from MIPS in 2018 because they practice part time. My advice is that they submit MIPS data anyway because now is the time to find out if your electronic health record (EHR) can do what it says it can do. A lot of dirty secrets are being uncovered. Speaking as the Executive Director of a Qualified Clinical Data Registry (QCDR), every day we are discovering another EHR vendor that is unable to meet the terms of its certification when it comes to transmitting the files required for MIPS participation. Don’t wait until next year to find this out. Most full time wound care practitioners are NOT exempt due to their high volume of Medicare patients. That means now is the time to get serious about end to end quality reporting and getting the mechanism in place for reporting honest healing rates.  Remember when the penalties really kick in for the majority in 2019, that’s when the pool of bonus money starts to grow. You want to be ready for that, so start this year.

The message to manufacturers is a bigger one. We have to start getting the cost data ready. We don’t have a wound care medical specialty society to shepherd this. We will never have a wound care medical specialty. The American Board of Medical Specialties has said very clearly there will be no more specialties. It might be possible for wound care to become a subspecialty. If you want to understand this process, read Richard Simman’s article about how this works in Todays’ Wound Clinic.

In the meantime, as a manufacturer, unless you want to transition to the cardiac or cancer space (both of which are doing a terrific job of getting ready, thanks to the millions of dollars they have poured into their Registry), we’ve got 2018 to do what is necessary, and after that it will be hard to convince CMS that your products have a value proposition – what with the majority of wound centers saying they heal everyone in 4 weeks, only 10% of wound care practitioners participating in MIPS quality reporting, and given the fact there are no quality measures to support improved patient outcomes with your products. That means a lot of fancy new cars in the shape of wound care advanced therapeutics could be driving off a cliff.