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Your Guide to the Merit-Based Incentive Payment System (MIPS)
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Your Guide to the Merit-Based Incentive Payment System (MIPS)
By: Mick Polo | Read Time: 6 minutes, 24 seconds
After the passing of the Affordable Care Act in 2010, several incentive programs were introduced to shift the healthcare sector to a value-based model from a fee-based one. In April 2015, a vote in the U.S. Congress overhauled the SGR (Sustainable Growth Rate) formula to pave way for a new quality reporting requirements and incentive system that was part of Medicare Access and CHIP Reauthorization Act Of 2015 (MACRA). After MACRA was enacted in 2017, Quality Payment Program (QPP) that the Centers for Medicare and Medicaid Services (CMS) currently administers followed. QPP comprises two tracks, including advanced Advanced Alternative Payment Models (AAPMs) and Merit-Based Incentive Payment System (MIPS)
MIPS combines three existing Medicare value-based programs, including Meaningful Use (MU), Value-Based Payment Modifier (VBM) and Physician Quality Reporting System (PQRS). In short, it is the Medicare form of pay-for-performance. The consolidation of reporting programs into MIPS reduced total financial penalties that physicians faced in the past with reporting errors and increased the potential for bonus payments. In fact, under MIPS, 98% of eligible healthcare providers in 2020 avoided the penalties associated with negative payment adjustment. Under the program, you can also improve your medicare programs, focusing on electronic health records, quality, and costs to enhance the relevance of your medical practice while reducing your administrative burden.
Most healthcare providers are, however, unsure about what MIPS entails for them to harness its benefits. Here are some guidelines that seek to answer the common question you might have on this reporting system.
Who Can Participate In MIPS?
MIPS uses the types of licenses of healthcare providers to determine the eligible candidates for the program. Simply put, not all clinicians will be eligible for the program. Some of the eligible classes include:
- Physicians
- Nurse practitioners
- Physical therapists
- Clinical psychologists
- Registered nutritionists and dietitians
- Physician assistants
- Certified nurse anesthetists
- Qualified audiologists and speech-language pathologists
- Occupational therapists
The above list does not include eligible candidates under group reporting. The eligible individual clinicians can be exempt from MIPS for several reasons. These include:
- Minimal time in Medicare: You are exempt from MIPS if you first enroll in Medicare during a performance year and have to wait for the following year.
- Lack of adequate volume in Medicare Part-B: Some of the Part-B volume thresholds you should meet to be part of MIPS include:
- Equal or more than $90,000 allowable.
- Equal or more than 200 beneficiaries.
- Equal or more than 200 services.
- Clinicians that exceed at least one of these thresholds can opt into MIPS to earn incentives. Those who do not surpass any threshold are exempt from MIPS.
- Excess volume thresholds in Advanced AP: The eligible clinicians [ECs} under this track are identified either as QPs {qualifying participants} or partial QPs {partial qualifying participants}. QPs are exempted from MIPS and cannot join to earn incentives. They are meant to have exceeded received payments of at least 75% through Advanced APM and seen at least 50% of patients.
Types of Payment Adjustments and Measures in MIPS
The leading factor compelling participation of clinicians in the MIPS program is its financial impact. According to industry experts, the projected incentives for 2021 are 5.3%. No practice wants their Part B payments penalized {negative payment adjustment}. Note that the payment adjustments in MIPS only affect Critical Access Hospital II and professional payments. They will not affect Part B drugs, Part A, Part C, Part D, and Critical Access Hospital I payments.
Two performance thresholds differentiate the clinicians that get incentives and those that incur penalties. These thresholds change annually. The prevailing ones for 2021 are:
- A performance threshold that includes the points a group or clinician should accrue to avoid penalties. The current threshold is 60.
- An additional performance threshold that entails the points needed to get a bonus. This currently stands at 85.
These two thresholds create the following financial results for clinicians:
- Negative payment adjustment: This entails penalties that the MIPS collects from clinicians that score less than the 60-point performance threshold.
- Neutral payment adjustment: This applies to clinicians that score the 60-point threshold.
- Positive payment adjustment: This entails the incentives paid to eligible providers who exceed the 60-point threshold. High scores translate to high incentives.
- Positive payment adjusts plus an extra positive payment adjustment: Here, MIPS pays incentives and additional bonuses to clinicians that exceed the 85-point additional point threshold.
What is a Performance Category for MIPS?
With the MIPS, you report the activities and quality measures you have undertaken within a performance period. CMS will then collect and calculate these measures to give you a specific performance score. There are four performance weighting categories on which your score is based. The final score will determine what payment adjustment will apply to a practice’s Medicare Part B claims. These include:
- Quality Category: This accounts for 40% of the score in MIPS, and such an element replaces PQRS and evaluates your care using different performance measures. You will select the performance measures that are most applicable to your practice from a list approved by CMS. This is the most important category for rehab therapists because, for them, it is weighted at 85%.
- Promoting interoperability: This replaces the MU program in the EHR {Electronic Health Records} Incentive Program and accounts for 25% of your score. It reflects how well a MIPS-eligible clinician uses EHR technology with an emphasis on the objectives that relate to information exchange and interoperability.
- Cost: This was previously measured under the VBM score before it was fully enacted in 2018. The cost parameter assesses a patient’s total cost of care and visits in a year. It currently contributes to 20% of your score.
- Improvement activities: Under this parameter, eligible clinicians will report 4 medium-weighted activities, 2 high-weighted activities, or 2 medium-weighted and 1 high-weighted activity. The reported activities should be completed in not more than ninety consecutive days. Improvement activities comprise 15% of your score.
MIPS Participation Options
You can participate in MIPS as an individual or a group. As a group, all eligible clinicians with a Tax Identification Number (TIN) should be part of the group’s reporting. The final score of MIPS is applied to each National Provider Identifier’s number within the TIN.
When signing up as an individual or group, first check your participation status to confirm whether you are obligated to report MIPS to steer clear of a negative adjustment. Your participation status also indicates whether you have a Special Status designation. A few clinicians and groups have reduced MIPS category requirements and alternate component weightings based on their Special Status designations.
The daily operation of your medical practice is undoubtedly your leading concern. Even so, in the current evolving landscape in U.S medical billing and healthcare, offering responsible care goes beyond the efficacy of your preventive services, prescriptions, and treatment plans. MIPS is primarily hinged on fiscal stewardship, a concept that considers the well-being and financial responsibility of a patient expressed by the shift to a value-based care model.
According to a survey by MGMA, about 50% of medical practices spend over $40,000 annually per clinician complying with Medicare incentive and payment programs. From the guidelines above, you appreciate that MIPS will save you a tidy sum in the time and resources spent complying with Medicare regulations. It, therefore, is worth participating in when aiming for profits in the healthcare sector.
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