MIPS: The Incredible Shrinking Incentive

by | Jul 12, 2018 | MIPS

I first received a hint that something funny was going on about two weeks ago. A colleague who is one of the foremost MACRA-MIPS experts contacted me about one of her clients. They had just checked the provider’s 2017 final MIPS score and it was a high one, 93.87. That is a score to be proud of. However, they would only be seeing a positive 1.68% payment adjustment in 2019. One would think a MIPS score that high score would bring a higher Medicare Part B reimbursement incentive. What is going on here?

We have been led to believe that a high MIPS score would put eligible clinicians in line for a Medicare Part B reimbursement adjustment at the high range of the potential incentives. Those adjustments, starting at +/- 4%, escalate to +/- 9% within a few years. And this does not include the “exceptional performance bonus” for scores over 70. The MIPS payment scheme was constructed to be a zero-sum system in which those with high scores received positive adjustments that equaled the negative adjustments of those with low scores. This is the “bell curve” we all hated in high school which mandated someone had to be given a “F” to balance the “A” awarded to someone else. In the case of the MIPS “bell curve” something unexpected seems to be happening. Is this an unintended consequence of some MACRA-MIPS rule making over the past few years?

Wikipedia tell us that  “unintended consequences are outcomes that are not the ones foreseen and intended by a purposeful action.” So, I’ve been wondering what decision was made that is producing lower than anticipated positive payment adjustments in the face of high scores. Could it have something to do with all those MIPS eligible clinicians who were excluded because they didn’t meet patient volume and reimbursement thresholds? That is exactly what a number of members of Congress think.

Five Congressmen in a letter last week to the Administrator of CMS made the following statements:

However, the program relies in part on meaningful participation in the program and the current regulations have reduced the payment incentives by excluding many providers from participation. 

For example, high performers are estimated to receive an aggregates payment adjustment in 2019 of 1.1 percent – based on their 2017 performance – even though adjustments of up to 4 percent are authorized. The trend of continued actual adjustments that are significantly less than authorized fails to incentivize meaningful participation in MIPS. In 2020, for example, CMS is projecting a 1.5 percent payment adjustment for high-performers, compared to a potential 5 percent adjustment level authorized under the law.

Based on feedback received from provider groups, we are concerned that the low-volume thresholds are too high and effectively preclude providers from earing more that that a nominal payment adjustment.

We also hope CMS can incentivize more significantly and meaningful participation in MIPS by adjusting low-volume thresholds adequately.

So, there you have it. CMS estimates that for the 2018 performance year about 60% of otherwise MIPS eligible clinicians are excluded based on low thresholds. Those low bars were heralded when they were announced but now we are seeing the other side of the coin. Tinkering with the distribution curve by excluding those on the low end is having consequences to the high end that are just now being realized. We can expect to hear more and more about this in the coming months. I would not be surprised to see regulations and rule-making focused on this issue sooner rather than later.