MIPS Will Impede Value-Based Purchasing Transition, MedPAC Argues

March 21, 2018 - The Medicare Payment Advisory Commission (MedPAC) recently suggested that Congress repeal the Merit-Based Incentive Payment System (MIPS), arguing the new value-based purchasing program “impedes the movement toward high-value care.”

In its March 2018 report to Congress, the commission explained that MIPS will not achieve CMS goals. The value-based purchasing program will not help beneficiaries choose high-quality clinicians, encourage clinicians to meaningfully change practice patterns to increase value, or support Medicare as it rewards clinicians based on value, not volume.

“[T]he basic design of MIPS is fundamentally incompatible with the goals of a beneficiary-focused approach to quality measurement,” MedPAC wrote.

Congress should eliminate the MIPS component of the Quality Payment Program, rather than reform the value-based purchasing track, because the program is “profoundly flawed,” the commission continued.

“MIPS is based on predecessor Medicare programs that have generally not been successful at improving population outcomes or substantively improving care processes,” the report stated. “In addition, MIPS imposes a significant reporting burden on clinicians; scores are not comparable across clinicians; it is administratively complex and produces inequitable results; and its small payment adjustments in the first years will be followed by subsequent arbitrary and possibly very large payments in later years, creating financial uncertainty for clinicians.”

READ MORE: Top 5 Facts About the Merit-Based Incentive Payment System

The commission particularly took issue with the ability of eligible clinicians to choose which measures to report on for the majority of MIPS performance categories. Clinicians must choose just six measures from a set of several hundred MIPS quality measures and they can choose from a list of 93 Improvement Activities.

Allowing eligible clinicians to choose their measures creates performance scores that are impossible to compare, impeding the ability of CMS and patients to determine true high-value providers.

The measures themselves are also deeply flawed, MedPAC argued. Only 31 percent of measures and reporting method combinations are outcome measures, the commission reported.

The remaining measures and reporting combinations are primarily process measures.

Of the 403 total MIPS measures, the program also contains 113 measures that meet the definition of topped-out, MedPAC explained. CMS plans to address six of the topped-out measures in 2018, but the federal agency could take as long as four years to remove the remaining measures in question.

READ MORE: MIPS Quality Reporting Flexibilities Trouble Providers, EHR Vendors

“This long timeline is meant to avoid disadvantaging certain clinicians who would be reporting these measures,” the report stated. “But in the meantime, additional clinicians can elect to report these measures.”

In addition to topped-out measures, 145 MIPS measures do not have benchmarks. Clinicians who choose to report on these measures cannot be compared to a baseline performance level.

Additionally, the financial incentives in MIPS will not push eligible clinicians into Advanced Alternative Payment Models (A-APMs), the commission told Congress.

Value-based penalties and rewards will be small in the first two transitional years of MACRA. However, the penalties and payments will significantly grow in subsequent years. Starting in 2019, CMS will set the MIPS performance threshold to the mean or median and increase the minimum and maximum payment adjustments to positive or negative 9 percent (up from positive or negative 4 percent).

But value-based payments could exceed the 9 percent limit. Because MIPS is budget neutral, CMS must scale the payment adjustments, potentially resulting in substantially greater payment adjustments than the percentage caps.

READ MORE: 4 Strategies for Merit-Based Incentive Payment System Success

For example, a recent Avalere analysis found that specialists could face a 16 percent payment swing under MIPS in 2018.

The A-APM track, however, only offers a 5 percent incentive payment for the first few years of MACRA implementation. After the 2022 performance year, A-APM participants will receive a higher Medicare Physician Fee Schedule update than non-qualifying participants.

“The potential for positive adjustments in MIPS may be so high that staying in FFS [fee-for-service] appears more attractive for clinicians than moving to A-APMs,” MedPAC argued. “This concern is not theoretical. Under Medicare’s current Value-Based Payment Modifier, certain clinician practices received very large payment adjustments; in 2017, 69 practices received payment bonuses equivalent to over 77 percent of their FFS payments.”

For these reasons, MIPS will not achieve CMS goals of improving care value and moving providers to alternative payment models. On top of that, MedPAC added that it will cost providers.

For 2017, CMS projected that the total cost burden of MIPS to total $1.3 billion. The burden would fall to $694 million by 2018, but primarily because less eligible clinicians will qualify for MIPS participation under new eligibility requirements.

“In other words, in the first two years of the program, clinicians will spend $2 billion implementing MIPS,” the report stated. “And the burden will continue as long as MIPS is in place because it will continue to require substantial clinician reporting.”

Congress should replace MIPS with another value-based purchasing program that aligns with the commission’s principles for measuring quality, MedPAC suggested. The principles include encourage care coordination, promoting care delivery and practice transformation, using population-based measures, and rewarding based on clear, absolute, and prospectively established performance goals. Value-based purchasing programs should also not be overly burdensome for providers.

The commission advanced a MIPS replacement that conformed with the MedPAC goals. The Voluntary Value Program would allow providers to self-organize into groups that would be collectively responsible for patient outcomes and costs. The groups would be rewarded based on performance on the same population-based measures.

CMS would also use administrative and claims data to evaluate voluntary groups, rather than having clinicians report to Medicare.

MedPAC outlined the Voluntary Value Program in the March 2018 report and told Congress that it would flesh out the program if policymakers expressed interest in repealing MIPS.

But industry groups are not fully supportive of doing away with MIPS after already preparing for its implementation and execution for several years.

“MedPAC suggests that MIPS is burdensome, inequitable, and too complex and thus ‘cannot succeed,’” stated the American Hospital Association’s (AHA) Vice President of Quality and Patient Safety Policy Nancy Foster. “But is it really time to scrap the MIPS barely one year into implementation?”

Foster advocated for MIPS reform, rather than repeal. For example, the AHA supports using a hospital’s results from legacy value-based purchasing programs in MIPS to reduce quality reporting in 2019. The industry group also pushed for CMS to include a broader range of facility types in the program and account for socioeconomic factors.

“[T]he AHA believes that MedPAC’s recommendation to scrap the MIPS is not only premature but also misguided,” Foster wrote. “Clinicians and hospitals will submit MIPS data for the first time this month. Instead of assuming the program is unworkable before clinicians submit any data, MedPAC should use data and experience from the field to inform any major changes.”

MGMA’s Senior Vice President of Government Affairs Anders Gilberg also suggested MIPS reforms.

“MedPAC’s March Report is an indictment of MIPS as implemented,” he said in an emailed statement. “MGMA believes there are steps that can be taken now to reduce clinician burden. CMS can begin by shortening the 2018 MIPS data reporting period from one-year to 90 days in the same way the agency did for meaningful use in 2014, 2015, and 2016.”

Congress will now review MedPAC’s recommendation to scrap MIPS. But industry experts noted that repealing the value-based purchasing program may be difficult under the current administration, in which a divided Congress is focusing on must-pass legislation.

The lack of details on a replacement program may also prevent policymakers from pushing forward a full elimination of MIPS.