Understanding MIPS, how much patients cost 'the system'

As physicians convert to the Merit-Based Incentive Payment System, they will eventually be required to consider the cost of care they deliver to patients.

Do you know how much your patients cost "the system" and how much of their total cost you can control? Soon, you will.

The Merit-Based Incentive Payment System (MIPS), part of the Quality Payment Program (QPP), is based on a clinician's performance in four reporting categories, the fourth of which is cost, which replaces the value-based modifier program. (The last three Practice Tips columns covered the other three MIPS performance categories: quality, advancing care information, and improvement activities.) Cost (formerly referred to as "resource use") will not count toward the total MIPS score during 2017, the transition year.

Cost is a component of value. Thus, in order to measure value, the QPP must measure cost. The idea in this category is to provide MIPS-eligible clinicians with information needed to provide appropriate care to patients and enhance health outcomes. Cost measures are calculated using claims data and do not require MIPS-eligible clinicians to report any data to CMS.

Although cost measures will not be used to determine the final MIPS score in 2017, CMS will calculate performance on certain cost measures and provide performance feedback to clinicians. Similar to the value-based modifier program, CMS will calculate measures of total per capita costs for attributed beneficiaries and a Medicare Spending per Beneficiary (MSPB) measure.

In 2017, because the cost performance category will not count toward the total MIPS score, practices will not have to do anything. Clinicians will be evaluated using three types of measures from the value-based modifier program for the cost performance category: total per capita cost, MSPB, and episode-specific measures. Starting in 2018, after the 2017 transition year, CMS will incorporate cost data into the overall MIPS composite score.

The episode-based measures include Medicare Part A and Part B payments for services determined to be related to a triggering high-cost condition or procedure (such as congestive heart failure, diabetes, or hip replacement). The payments included are adjusted for geography and are risk-adjusted for the clinical condition of beneficiaries. Starting in performance year 2018, performance feedback will be available on at least an annual basis (likely more than once a year). These measures will be calculated using claims data, so no additional submission by the physician is required for this performance category.

However, participants need to know how these claims data will be analyzed. Even though the cost performance category is not a factor in the 2017 overall scoring, it is still important to get a handle on how MIPS participants will be scored, as this performance category will be incorporated into the overall score starting in 2018 and will increase to 30% of the MIPS score by the third program year, or 2019.

The best way to prepare for the cost category of MIPS is to review and understand your 2016 Quality and Resource Use Reports.

To understand the value-based modifier program, go online. For more information on the Quality Payment Program, go online.