Does MIPS Spell Doom for Small Medical Practices?

Last year, in a rare moment of bipartisanship (especially where health care policy is concerned) Congress enacted Medicare Access & CHIP Reauthorization Act of 2015 (MACRA). MACRA was a response to the growing consensus that double-digit annual growth rates for Medicare outlays under the traditional, fee-for-service delivery model of providing health care in the U.S. simply isn’t sustainable, and that the government should be buying quality care and efficient outcomes, not just volume, when it pays for medical services. The changes MACRA wrought include:

• Ending the Sustainable Growth Rate (SGR) formula for determining Medicare payments for health care providers’ services.
• Establishing a new framework for rewarding health care providers that (ostensibly) will reward value over volume.
• Combining existing quality reporting programs into one new system.

MACRA sunsets the payment adjustments associated with the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VPM), and the Medicare Electronic Health Record (EHR) incentive program, and combines them all into a single, consolidated program called the Merit-Based Incentive Payment System (MIPS). MIPS—which is slated to begin in 2019—consists of four weighted performance categories against which eligible professionals will be assessed: Quality; Resource Use; Clinical Practice Improvement Activities; and Meaningful Use of Certified EHR Technology.

Based on the MIPS composite performance score, providers will receive positive, negative, or no adjustments in Medicare payments they are owed. Positive and negative adjustments will be up to a maximum of 4 percent in 2019, and will grow over time to a maximum of 9 percent in 2022 and beyond.
HHS has already set an aggressive goal for tying Medicare payments to quality and value, even before MIPS takes effect. By the end of 2016, it expects that 85% of Medicare fee-for-service payments will be tied to quality or value, and that 90% of fee-for-service payments will be tied to quality or value by the end of 2018.

Whether HHS’s alternative payment schemes will actually result in quality and value is hotly disputed – perhaps most hotly in the last month by Robert A. Berenson, M.D., of the Urban Institute in Washington, D.C. One of the nation’s most respected health care policy experts, Dr. Berenson served on the Medicare Payment Advisory Commission, headed the Medicare payment policy and private health plan contracting in the Centers for Medicare & Medicaid Services (CMS), and served as an assistant director of the White House Domestic Policy Staff under President Carter. In a JAMA Forum editorial published in January, Dr. Berenson predicted MIPS would fail to improve the quality of US healthcare because of its obsession with what he characterized as a “few, random, and often unreliable measures” of physician performance, at the expense of paying proper attention to such essential qualitative factors as rates of misdiagnosis.

In an interview in the most recent issue of Medical Economics, Dr. Berenson told the publication that only about 50 percent of physicians in private practice currently submit data under PQRS because of the administrative burden and because they don't think the measures are good ones. However, under the current regime, non-cooperating practices only stand to lose only 2 percent of revenue if they don’t participate. Under MIPS, the stakes are higher: Eventually, practices will stand to lose up to lose 9 percent. Dr. Berenson pointed out that in focusing on data production regarding quality, resource use, clinical practice improvement activities and meaningful use of electronic health records systems, MIPS will strain the financial resources of small practices, perhaps to the breaking point. Small physician practices don't have the IT systems they need to collect and report this data, Dr. Berenson argues. They would need to spend the money to hire a consultant to produce the data from their medical records or use a registry option the government is offering, which will also entail expense. Dr. Berenson believes many small practices will decide they can't afford to do that, and simply dissolve. 

Forecasts of doom for small practices are premature: Much will hinge on the outcome of CMS’s rulemaking for MIPS. Final rulemaking is scheduled for release this year. Among other things, CMS will define a threshold for low-volume providers who are exempt from MIPS, based on some combination of minimum Medicare patients, service volume, and/or billings. Depending on how the low-volume threshold is defined, it could provide considerable breathing space for small providers, whose air supply might otherwise be cut off by a value-based payment system that demands extensive, expensive data gathering.

Who knows? The low-volume threshold could even make small and solo practice more desirable, by creating a safe haven from the onerous reporting requirements faced by larger groups and institutional providers.