E3 – Positioning for Success in the Merit-Based Incentive Payment System

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In the final episode of our QPP podcast series, Nelly Ganesan, one of our MACRA experts, talks about the Merit-Based Incentive Payment System (MIPS) optimization.
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.
“A clinician’s performance in 2017 will impact payment adjustments made in 2019. Performance year 2018 will dictate bonuses or penalties in 2020, and so on.” Nelly Ganesan, Avalere



Nelly Ganesan advises clients on the implications of quality-related healthcare policies, including but not limited to public and private quality reporting programs, value-based care, and payment and delivery models.

This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page.

Explore Other Interviews in This Series

E2 – Qualifying Alternative Payment Model Participants

E1 – Navigating MACRA in the First Performance Year


Nelly: The Merit-Based Incentive Payment System—otherwise known as the MIPS—is one of the paths available for clinician participation under the Quality Payment Program, introduced as part of the MACRA legislation.

The MIPS replaces three existing quality reporting programs: (1) PQRS; (2) EHR meaningful use; and (3) the value-based payment modifier. Under the MIPS, clinicians have an opportunity to see positive or negative annual payment adjustments based on the clinicians’ performance in four categories: (1) quality; (2) cost; (3) advancing care information, also known as meaningful use; and (4) practice improvement activities. Each of these performance categories are weighted to determine an individual clinician’s composite score. In year one of the program, quality has the highest weighting of 60 percent.

The MIPS program is somewhat similar to what clinicians have been familiar with if they have been participating in value-based care over the years. By introducing this pathway, CMS’ intent was to streamline the reporting requirements to reduce provider burden while simultaneously improving patient care.

Under this program, CMS introduced some flexibility for clinicians, including what was called a low-volume threshold, which allowed clinicians with less than or equal to $30,000 in Part B charges OR 100 or fewer patients to be exempt from the MIPS program. This accounts for approximately one-third of clinicians. For those clinicians that may fall into this exemption but are interested in qualifying for a positive payment adjustment, CMS has set aside dollars to provide technical assistance in hopes for these small practices having success under this program.

The MIPS is a budget-neutral program in that the lowest performers will see payment reductions that will be paid to the highest performers. In other words the “losers” will pay for the “winners.” The budget-neutral payment adjustment will be a maximum positive or negative 4% for performance year 2017, increasing over three years to +/-9%. A clinician’s performance in 2017 will impact payment adjustments made in 2019. Thus, similar to other CMS quality programs, the performance year dictates payment adjustments that will be made in the payment year, reflected by a two-year lag. Performance year 2018 will dictate bonuses or penalties in 2020, and so on. In addition, CMS also introduced a separate pool of funds ($500 million each year) for exceptional performance, which allows for high-performing clinicians to have the potential to earn a significant bonus in addition to the payment adjustment.

In year one of this program, CMS expects about 75% of all clinicians to participate in the MIPS. Overtime, it is likely that a number of providers will transition over to Advanced Alternative Payment Model participation.

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