Proposed rule on 2019 Physician Fee Schedule offers greater incentives

Revisions in the Quality Payment Program (QPP) proposed rule, tucked into the 2019 Physician Fee Schedule, will make for heightened competition and expectations among physicians participating in the Merit-based Incentive Payment System (MIPS) as the Centers for Medicare & Medicaid Services (CMS) continues to link performance to patient outcomes.

In looking toward 2019, physicians should look to avoid missing out on their bonuses. They need to make sure they are informed and implementing measures on the performance standards to receive their bonuses, but also be mindful of the penalties they can incur with non-compliance, which outweigh any argument that it is not worth the time it takes to be proactive on reporting.

The potential MIPS incentives and penalties driven by the MIPS score are much more substantial than the inflationary adjustments CMS has proposed. In the 2018 QPP final rule, CMS predicted that 74 percent of MIPS-eligible clinicians will earn a score of 70 or greater for the 2018 performance year. 

This bolsters the expectation that the performance threshold (PT) for 2019 will be much higher than for 2018, perhaps into the 70s, thereby significantly raising the level of competition for earning incentives and avoiding penalties. In addition, CMS projects for 2018 that 76 percent of all MIPS-eligible clinicians will be in provider organizations of 25 clinicians or more. Therefore, the main competition to exceed the PT will be among medium-sized and large organizations – and in my professional opinion, I would venture to say this will intensify each year. 

Organizations intent on maximizing their chances for maintainable success under MIPS are leveraging predictive analytics to gauge performance by provider and taking steps to implement performance improvement activities in line with multi-year plans and strategies for success in value-based care.

Reputational Impact

Remember, this is a program that anticipates winners and losers, and you want to be on the winning side, or your monetary penalties for non-participation and/or non-compliance will find their way into the pockets of the proactive physicians, as CMS likes to label “the winners” of the Medicare Access and CHIP Reauthorization Act (MACRA)/MIPS program.

CMS publishes an array of clinician-identifiable performance measures through its Physician Compare website at for free.

In addition, MACRA requires CMS to publish each eligible clinician’s annual MIPS score and performance category scores within approximately 12 months after the end of the relevant performance year. Consequently, more than half a million CY 2017 MIPS scores will be publicly available around the end of CY 2018, all identifiable by clinician and group.

Consumers will be able to clearly see their clinicians rated against national peers on a scale of 0 to 100. Even more of a wake-up call is the fact that the 2018 QPP Final Rule states that a five-star rating scale will be applied to every MIPS performance measure for the purpose of peer comparisons (I feel like this is a game show).

But in today’s competitive market, and as consumers spend more out of pocket for their healthcare, they are seeking more transparency into clinician quality and the cost-value equation. A recent study found that 65 percent of consumers are aware of online physician rating sites and that 36 percent of consumers had used a ratings site at least once. Think Yelp, for example. A one-star difference on a five-star rating scale on Yelp can drive a 5 to 9 percent difference in service provider revenues. We’ve done the math with my own clients. This is not a program you can ignore.

The Score Follows the Provider

There are no do-overs here. The financial and reputational impacts stemming from a MIPS score are irrevocably attached to a clinician, even if the clinician changes organizations. 

If a clinician earns a MIPS score for 2018 and moves to another organization in 2019, for example, the new organization will inherit the MIPS payment adjustment applied in 2020, based on the 2018 score earned by the clinician at his or her previous organization. This fact will impact how organizations will credential and contract with clinicians, and may impact the organizations’ ability to attract the best and brightest physicians and clinical providers if group scores are not competitive. In addition, every historical MIPS score earned by a clinician is a permanent part of the publicly reported record released and maintained by CMS, effectively making MIPS scores an increasingly significant portion of a clinician’s resume.

Did we get your attention? Good.

Looking forward to 2019, we need to look back to 2018 and earlier for program details.

Here’s a basic primer:

MACRA permanently repealed the flawed sustainable growth rate (SGR) and set up the two-track QPP that emphasizes value-based payment models. The MIPS track replaces three existing quality programs and adds a new performance category.

MIPS annually scores eligible Medicare Part B clinicians on a 100-point performance scale that combines and expands upon the legacy Medicare Meaningful Use (MU), Physician Quality Reporting System (PQRS), and Value-Based Modifier (VBM) programs. MIPS adjustments to a clinician’s Part B payments are based upon the MIPS performance score and applied to the Medicare payment for every Part B item and service billed by the clinician two years after the performance year (e.g. 2019 is the payment adjustment year for the 2017 performance year). A significant portion of the incentive pool is derived from the penalties applied to poor performers, effectively making MIPS a program in which the “winners” earn rewards at the expense of the “losers.”

MIPS is one of the two payment tracks created under MACRA; the other is the Advanced Alternative Payment Model (AAPM) track. MIPS adjusts payment based on performance in four performance categories:

  • Quality: Based on the Physician Quality Reporting System (PQRS)
  • Cost: Based on the Value-based Payment Modifier (VBPM)
  • Promoting Interoperability (PI): Based on the Medicare EHR Incentive Program (Meaningful Use)
  • Improvement Activities: A new category for 2018

Physicians can participate either as individuals or groups. When reporting as a group, all eligible clinicians (ECs) reporting within the same tax identification number (TIN) must be included in the group’s reporting. The MIPS final score will be applied to each national provider identifier (NPI) within the TIN. Additionally, a TIN cannot be split into multiple groups.

Although it seems like only yesterday, here is a review of major changes that took place in 2018. This also provides some context for the PPS proposed rule:

  • Addition of a small practice bonus – ECs in small practices (15 or fewer clinicians) will receive a five-point bonus added to their MIPS final score.
  • Addition of a complex patient bonus – ECs can receive up to five bonus points to their final score for providing care to complex patients. The size of this bonus is based upon average hierarchical condition category (HCC) risk scores and the proportion of dual-eligible patients (this becomes tricky and more difficult with the way ICD-10-CM has defaulted many of the higher-risk diagnoses into one combined service.)
  • Increased low-volume threshold – ECs who provide care to fewer than or equal to 200 Medicare Part B beneficiaries or received less than or equal to $90,000 in Medicare Part B payments are excluded from MIPS. Eligible clinicians can check their MIPS eligibility status on the QPP website:
  • Longer performance period – The performance period for the quality and cost categories is a full calendar year (Jan. 1-Dec. 31, 2018). The performance period for the improvement activities and promoting interoperability (PI) categories is any consecutive 90 days.
  • Increased data completeness – In the quality category, ECs must report on at least 60 percent of patients eligible for the measure, regardless of payor.
  • Increased cost weight/decreased quality weight – The weight of the cost category has increased to 10 percent for the 2018 performance period. The weight of the quality category has decreased to 50 percent. The quality and cost performance categories are scheduled to be equally weighted at 30 percent, starting with the 2019 performance period.
  • Virtual groups available – Solo and small practices (10 or fewer clinicians) can join together to participate in MIPS as a virtual group.
  • Small practices can apply for a hardship exemption in the PI category.
  • To accommodate ECs affected by extreme and uncontrollable circumstances, such as natural disasters, CMS has made hardship exemptions available for the quality, cost, and improvement activities categories. This is in addition to the pre-existing PI hardship exemptions.

MACRA/MIPS can be complicated and confusing for medical practices. Physicians must balance regulatory compliance with provider efficiency. And they need to understand the implications of the proposed program in order to secure their bonuses, and not fall into the category of “MACRA/MIPS loser” – which can drop them into the penalty box, monetarily and publicly.

Program Note:

Listen to Terry Fletcher report on topic today on Talk-Ten-Tuesdays, 10 a.m. EST.

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Terry Fletcher, BS, CPC, CCC, CEMC, CCS, CCS-P, CMC, CMSCS, CMCS, ACS-CA, SCP-CA, QMGC, QMCRC, is a healthcare coding consultant, educator, and auditor with more than 30 years of experience. Terry is a past member of the national advisory board for AAPC, past chair of the AAPCCA, and an AAPC national and regional conference educator. Terry is the author of several coding and reimbursement publications, as well as a practice auditor for multiple specialty practices around the country. Her coding and reimbursement specialties include cardiology, peripheral cardiology, gastroenterology, E&M auditing, orthopedics, general surgery, neurology, interventional radiology, and telehealth/telemedicine. Terry is a member of the ICD10monitor editorial board and a popular panelist on Talk Ten Tuesdays.

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