CMS’ Surprise: The Quality Payment Program in 2018

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Keep an eye on the Quality Payment Program (QPP), created by the Medicare and Chip Access and Reauthorization Act of 2015 (MACRA), as the QPP enters its second performance year in 2018. The QPP is subdivided into two broad payment tracks: risk-bearing alternative payment models (APMs), such as downside risk Accountable Care Organizations (ACOs); and the Merit-Based Incentive Payment System, or MIPS, which aggregates scores across four domains to adjust payments based on performance. Between those two options is an important hybrid track for ACOs and participants in other alternative payment models that do not accept downside risk, called MIPS-APMs.

In its proposed rule of July 2017, CMS proposed several changes that meant MIPS would apply to fewer physicians, and would generally be less stringent. CMS also originally proposed completely removing the cost accountability domain from MIPS for 2018, despite the underlying statute requiring that cost account for 30% of the overall MIPS score by 2019. In addition, CMS proposed to reduce the quality measure “data completeness standards,” effectively allowing clinicians to report quality scores based on a smaller subset of patients.

Under CMS’ final rule, far fewer clinicians will now have to participate in MIPS. Under the new minimum threshold for MIPS’ participation, clinicians must have $90,000 in annual Medicare billings and have 200 Medicare part B beneficiaries. CMS surprised many by reversing its proposed position regarding the cost domain and finalized a cost domain weight of 10% for the 2018 performance year, reducing the quality domain from 60% to 50%. CMS also declined to adopt the 90-day reporting period for quality. In 2018, the minimum score for avoiding negative penalties will rise to 15 from 3 in 2017.

These may seem like normal adjustments for phasing in a major new payment structure; however, health care analysts are trying to read the tea leaves in these steps. Why? The large increase in clinicians now exempt from MIPs requirements has many wondering if the new administration is softening the transition to a quality physician reimbursement system or possibly reconsidering the approach altogether. Also, the surprise move to finalize the cost domain at 10% overshadowed the accompanying announcement that the cost calculations in 2018 will not employ the new costs episodes that CMS has been developing for the QPP. Instead, CMS will use two measures from the previous Value Modifier—the Medicare Spending per Beneficiary measure, measuring the cost around a hospital episode, and the Medicare Per Capita Cost measure of total costs.

Further confusing analysts, in October 2017, the Medicare Payment Advisory Commission called for the immediate repeal and replacement of MIPS. In an interview at that time, David Glass, principal policy analyst at MedPAC, said, “Time is of the essence to develop an alternative for MIPS.” And in December, a report from the Health and Human Services Office of the Inspector General highlighted the challenges posed by ongoing physician confusion about the program.

Needless to say, the QPP, and its MIPS path to Medicare reimbursement, warrant careful watching.