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EDITOR’S NOTE: The following is the second installment in a three-part series on outpatient clinical documentation integrity.

In Part 1 of this series, we detailed the concept of risk adjustment and how historically, the healthcare industry rewarded volume under the fee-for-service (FFS) model. The Centers for Medicare & Medicaid Services (CMS) is the single largest payer for healthcare in the United States, providing more than 90 million Americans with healthcare costing more than $3 trillion annually. Unchecked healthcare expenditure threatens to bankrupt the system.

The Hospital Value-Based Purchasing (HVBP) program was authorized by Congress in the 2010 Patient Protection and Affordable Care Act (PPACA). The intent was to incentivize quality. The results are made available to the public in an effort to encourage institutional process improvement (Hospital Compare). Another term you may have heard to describe these type of initiatives is pay-for-performance (P4P).

In 2015, the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) was passed. It replaced the flawed Sustainable Growth Rate (SGR) formula and established the Quality Payment Program (QPP), with stated goals of better care, smarter spending, and healthier people. Health care providers (HCPs) are automatically entered into the QPP if they meet certain requirements (billing Medicare $30,000 annually, seeing at least 100 Medicare patients per year, not being an entity’s first year caring for Medicare patients).

The QPP is a budget-neutral system. Providers rewarded are offset by providers penalized. There is an additional $500 million for bonuses to be distributed over the first five years to exceptional performers.

The program has two pathways: The Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). Note that the “merit” to be incentivized is quality/value of medical care. For the first year, almost all providers reported under MIPS because it must be established that a given HCP has enough participation in APMs to opt out of MIPS.

(Be aware that the information in this article is current as of May 19, 2017. The program and categories/domains/subcategories are fluid, and anyone reading this article should go to https://qpp.cms.gov for the most up-to-date information).

The government revised the QPP such that a HCP now can “pick your pace.” This allows providers to participate minimally to avoid penalty, or maximally to attain incentive status – possibly the exceptional performer bonus status.

The percentage of MIPS that each performance category comprises will adjust yearly. Measures submitted in the index year are penalized or rewarded two years later (2017 measures count for 2019 payment adjustments).

MIPS consists of four performance categories:

  1. Quality (60 percent in 2017): Replaced Physician Quality Reporting System (PQRS), which used incentives and penalties to encourage reporting of quality measures to Medicare. Eighty-six quality measures are found in these domains, with several examples being:
  • Person- and caregiver-centered experience outcomes (referral to hospice for ESRD patients withdrawing from dialysis; ALS patient care preferences; CAHPS, etc.)
  • Patient safety (monitoring of schizophrenic patients’ adherence to antipsychotics; elder maltreatment; falls screening, etc.)
  • Communication and care coordination (All-cause hospital readmission; functional outcome assessment; avoidance of inappropriate colonoscopy; reminder system for mammograms, etc.)
  • Community, population and public health (pediatric dental decay)
  • Efficiency and cost reduction (avoidance of inappropriate use of antibiotics for otitis media, sinusitis; utilization of imaging for melanoma, blunt head trauma, prostate cancer, etc.)
  • Effective clinical care (blood pressure management; CABG postoperative complications; HIV load suppression, etc.)

These quality measures are subcategorized according to whether they are process or outcome measures. A provider must add at least one measure to prevent a penalty. To fully participate and be eligible for the maximum incentive, an HCP reports six measures, including one outcome measure, for a full year.

  1. Resource Use (Cost) (0 percent in 2017; to start in 2018): This category is not being measured yet. Providers are not going to have to actively submit data, as it will be calculated from adjudicated claims.
  2. Clinical Practice Improvement Activities (15 percent in 2017) is a brand new category, and there are 92 measures from which to choose. The subcategories include:
  • Expanded practice access (telehealth services, 24/7 access to patient medical records)
  • Population management (anticoagulation, glycemic management services, etc.)
  • Care coordination (practice/process improvements in timely communication of test results, development of individual care plans, etc.)
  • Beneficiary engagement (engagement of patients, family and caregivers in plans of care; improved practices in pre-visit management, patient coaching, dissemination of self-management materials, etc.)
  • Patient safety practice assessment (antibiotic stewardship; fall screening; prescription drug monitoring, etc.)
  • Achieving health equity (use of a qualified clinical data registry (QCDR) for standard questionnaires, patient-reported outcome tools, screening processes, etc.)
  • Behavioral and mental health (depression screening; tobacco, alcohol use, etc.)
  • Emergency response and preparedness (participation on disaster medical assistance team, in domestic or international humanitarian activities, etc.)
  1. Advancing Care Information (25 percent in 2017): This replaced Meaningful Use, and there is a set of measures relating to technology. Examples of measures are e-prescribing, secure messaging, medication reconciliation, and providing patient access. Providers can submit up to nine measures for a minimum of 90 days.

Perhaps the most important thing you should know about MIPS is that the entity tasked with offering providers assistance with the program, QualityNet.org, delivers superlative customer service. I strongly recommend that any provider contact them to navigate the QPP.

An Alternative Payment Model (APM) is a compensation approach that encourages high-quality and cost-efficient care. It can relate to a specific clinical condition, a care episode, or a population, and there may be some crossover (for instance, comprehensive ESRD care seems to relate to a specific clinical condition and a population, to me).

Advanced APMs are a subset, and the HCP incurs risk up front, so there is only a potential reward when participating fully. This is specifically financial risk – you get a specified amount of money to manage a patient, but if you exhaust your resources, you may have a negative balance, so it behooves you to be cost-efficient. Accountable Care Organizations and bundled payments are examples of advanced APMs.

We now enter the realm of population health management (PHM). PHM is the aggregation and analysis of a population’s health to try to identify opportunities to improve clinical and financial outcomes. Whereas FFS often represented retrospective payment for episodic ill-health treatment, PHM involves continuous, proactive, wellness management to hopefully prevent the need for medical care.

This is not the first foray into population health management. In the 1990s, the Health Maintenance Organization (HMO) model established a gatekeeper that would coordinate a patient’s care and put a check on utilization. The HMO received capitated money (payments per head), and if there was excess funds at the end of the cycle, the HCPs would share in the leftover money. The flaw in this model was that greedy, unscrupulous gatekeepers would withhold necessary investigations or treatment to retain money for themselves.

Capitation has resurfaced in the Accountable Care Organization (ACO) model. An ACO is an affiliation of doctors, hospitals, and other HCPs that work in concert to provide coordinated, high-quality care, with quality metrics and cost effectiveness impacting payment. Risk adjustment figures determine the per-patient allotment, and thus we encounter the Hierarchical Condition Categories (HCCs).

In Part 3 of this series, we will discuss HCCs in greater detail and explore the differences in risk adjustment in the inpatient and PHM worlds.


Erica E. Remer, MD, CCDS

Erica Remer, MD, FACEP, CCDS, has a unique perspective as a practicing emergency physician for 25 years, with extensive coding, CDI, and ICD-10 expertise. As physician advisor for University Hospitals Health System in Cleveland, Ohio for four years, she trained 2,700 providers in ICD-10, closed hundreds of queries, fought numerous DRG clinical determination and medical necessity denials, and educated CDI specialists and healthcare providers with engaging, case-based presentations. She transitioned to independent consulting in July 2016. Dr. Remer is a member of the ICD10monitor editorial board and is the co-host on the popular Talk Ten Tuesdays weekly, live Internet radio broadcasts.

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