Should Congress Repeal the Merit-Based Incentive Payment System?

March 08, 2018 - As over 400,000 eligible clinicians prepare to submit data to the Merit-Based Incentive Payment System (MIPS) by the end of March, industry experts are urging policymakers and HHS officials to reconsider and even repeal MACRA’s most popular payment track.

In a recent Health Affairs blogpost, industry experts urged healthcare leaders to repeal MIPS because the program’s performance evaluation methodology and financial incentives will not help the program to achieve its goals of improving patient care and providing information to help patients chose high-value providers.

The authors primarily hailed from the Brookings Institution, but they also included Tim Gronniger, former Chief of Staff and Director of Delivery System Reform at CMS and current Senior Vice President of Development and Strategy at Caravan Health.

They explained that the four performance categories under MIPS, which evaluate performance at the individual clinician level, contain major flaws that will prevent the value-based reimbursement program from achieving its goals.

Three of the four MIPS performance categories – Quality, Advancing Care Information, and Improvement Activities – allow eligible clinicians to select the quality measures on which to submit data.

READ MORE: The Pros and Cons of Quality Measure Choices In MACRA, MIPS

CMS designed the quality measure choice aspect to ensure that clinicians of all types can report on quality measures that pertain to their practice. But allowing clinicians to choose the measures on which to report undermines the goals of MIPS, the experts contended.

“Most obviously, allowing broad clinician choice means that each individual clinician will end up reporting different measures, directly undermining MIPS’s ability to help patients compare clinicians,” they wrote.

Quality measure choice also undermines the effectiveness of the program’s financial incentives. Eligible clinicians can select quality measures on which they already perform well to maximize their scores, which translate into payment adjustments.

Eligible clinicians can also report on Advancing Care Information and Improvement Activities that they were already planning to do outside of MIPS.

“Clinicians’ ability to achieve the maximum score (or a very high score) by merely focusing on ‘easy’ measures and activities will greatly diminish the incentives to improve patient care that MIPS would otherwise have created,” the article stated. “An additional problem is that the measures and activities where it is easiest for a particular clinician to achieve a high score will generally not be the measures and activities where additional effort would pay the greatest dividends for Medicare beneficiaries and the Medicare program.”

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

Eligible clinicians selecting ‘easy’ measures should be a serious concern for CMS because it happened under a predecessor program, the Physician Quality Reporting System (PQRS). The top five measures used in the PQRS were routine components of medical practice, such as documenting medications in the medical record and body mass index screening.

But even the MIPS performance category that does not allow for quality measure choice contains flaws, the experts argued.

Under the MIPS Cost category, small practices may face skewed performance results because measure performance will be based on data from a small number of patients.

“As a result, chance plays a significant role in determining whether a clinician receives a high or low score for this category,” the experts wrote. “This dilutes clinicians’ incentives to invest in improving efficiency.”

CMS is seeking to alleviate this issue with the Cost category by developing a range of cost measures, scoring clinicians on just the measures for which a minimum sample size is present, and averaging performance across the measures.

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

“Unfortunately, this approach creates a haphazard overall set of incentives to improve efficiency,” the article stated. “This problem will become much more severe if CMS follows through on its stated intention to increase the number of cost measures in use in MIPS.”

Additionally, the industry experts explained that MIPS, as it stands, will not encourage eligible clinicians to participate in Advanced Alternative Payment Models (Advanced APMS), which is another major goal for the program.

MIPS payment adjustments are capped at positive and negative 4 percent in 2019 and will gradually grow to 9 percent by 2022 and stay there.

But payment adjustments are subject to budget neutrality policies, meaning CMS has to pay the same amount in bonuses as it receives in penalties. Therefore, positive payment adjustments could be subject to a scaling factor up to three times to maintain budget neutrality.

Advanced APMs only contain a 5 percent incentive payment for the first few payment periods.

The financial incentives under MIPS may incent eligible clinicians to remain in MIPS rather than assume downside financial risk in the more advanced MACRA track.

With these flaws, the experts advised policymakers to eliminate MIPS. In its place, Congress should implement two types of policies.

First, Congress should expand and improve the financial incentives for Advanced APMs, extend the track to other providers (e.g., hospitals), and make the 5 percent incentive payment permanent. Second, Congress should develop targeted incentives for “well-defined activities that can be readily measured and rewarded at the clinician level” for providers who are not in Advanced APMs.

In a separate editorial in the New England Journal of Medicine, Gail Wilensky, PhD, Senior Fellow at Project HOPE and former Medicare head under the first Bush administration, echoed concerns with MIPS. However, she advised Congress to alter MIPS, rather than immediately eliminate the value-based reimbursement program.

Wilensky stated that she agreed with the Medicare Payment Advisory Commission’s (MedPAC) assessment of MIPS, which expressed similar views to the experts in the Health Affairs article. The commission stated in its June 2017 report to Congress that MIPS does not truly detect high or low-performing clinicians or help beneficiaries select high-value providers because of quality measure selection and physician self-reporting of performance.

MedPAC offered an alternative to MIPS, called the Voluntary Value Program. Under the alternative program, CMS would withhold 2 percent of fee-for-service Medicare reimbursement.

To recoup the withheld payments, physicians could join an Advanced APM or face assessment as a group on population-level performance measures, such as mortality and readmission rates. Physicians that do not participate would lose their withheld payments.

While Wilensky agreed with MedPAC’s criticism of MIPS, she explained that a full repeal may not be possible.

“One concern is the lack of support from the various medical associations,” she wrote. “In addition, with a closely divided Senate (the Republican majority is now at 51 to 49) and upcoming midterm elections in which Democrats hope to make major gains, only ‘must-pass’ legislation — such as a budget bill and maybe an immigration bill — is likely to pass in 2018. Moreover, no one knows whether the MedPAC proposal will work or what unintended consequences are likely to result.”

Instead of a complete MIPS repeal, Wilensky suggested that the CMS Innovation Center implement the Voluntary Value Program as a demonstration.

“A pilot program would provide real-world evidence as to whether this strategy is an improvement over the MIPS in terms of helping clinicians improve their practice and helping beneficiaries identify the healthcare organizations that offer better outcomes for their needs,” the editorial stated. “It would also test whether CMS can perform the claims-payment and other analyses that would be required under the proposal.”

CMS should also allow clinicians to remain outside of MACRA without incurring a penalty for two or more years under the proposal, she added.

In addition, Wilensky emphasized that MIPS reform will not happen unless providers express their concerns with the value-based reimbursement program.

“Practicing physicians need to make their views about the MIPS and its alternatives known to their representative medical groups and, if necessary, to their representatives in Congress as well,” she concluded. “In the past, practicing clinicians have been woefully bad at making their voices heard. Now is a good time for that to change.”

While a full MIPS repeal is unlikely, the separate editorials show that healthcare stakeholders still have reservations about the new value-based reimbursement program as the deadline for quality reporting approaches at the end of March.