Practice Management Alert

Plus, how to do the absolute minimum to meet MIPS requirements in 2017.>

The good news about the final MACRA rule and the Merit-Based Incentive Payment System (MIPS)? Practices won’t have to do very much in 2017 to avoid reimbursement penalties in 2019.

Compared to the proposed MACRA rule, MIPS minimum reporting requirements are scaled down significantly in the final rule. At least 90 percent of practices will receive a positive or neutral MIPS payment adjustment for the first performance year.

2017 is kind of like a “Get Out of Jail Free Card” when it comes to MIPS, says Mike Schmidt, an HIT compliance expert who works for Medflow in Charlotte, NC and who recently presented a webinar that briefed ophthalmology practices on the requirements.

There is only a 90-day reporting period in 2017, during which practices must do one of these three options:

1. Report at least one quality measure, one time, on one patient, or
2. Perform and document at least one Clinical Practice Improvement Activity (CPIA), or
3. Meet the four Advancing Care Information (ACI) base measures.

The third option is so difficult for most practices there might as well be two, Schmidt said in his webinar.

Tip: If you choose the second option above, make sure you document any CPIA activities you choose to do so that you have them on file in the event of an audit, Schmidt recommends. Form a MIPS team, which includes at least one physician champion, as well as the practice manager. Hold quarterly meetings on improvement activity, document the minuets, record actions taken, and keep them on file.

MIPS Will Burden Small Practices the Most

Even CMS acknowledges that, long-term, MIPS requirements will be hardest to meet for practices with 10 or fewer providers. Most practices this size will see negative payment adjustments in the long run, according to CMS’s own data

The requirements for 2017 are pretty easy, but don’t let them lull you into thinking MIPS is a cakewalk, experts warn. Think of 2017 as a “catch your breath” year—a time to do the bare minimum to meet MIPS requirements as you ponder what it means for your practice’s finances long-term and whether your practice wants to play MIPS for real in the coming years.

Will MIPS Payment Adjustments Be Worth All the Trouble?

MIPS could positively or negatively impact your reimbursement by four percent in 2019 (based on 2017 reporting) and by as much as nine percent in 2022 (based on 2020 reporting). MIPS is budget-neutral and graded on a curve, so there will be winners and losers depending upon your peers’ performance.

Some providers are thinking about forgoing the hassle and gamble of MIPS completely, similar to how some providers opted out of the Meaningful Use and PQRS. (Note: MIPS incorporates elements of both these older programs.) But MIPS offers higher-performing groups a chance to attain significant financial incentives while also carrying a risk of payment reductions.

Take, for example, a medical practice that earns $1 million in revenue with a fairly standard 60 percent overhead and bills Medicare for a third of its patients. Right now, that’s $600,000 in expenses and a net of $400,000.

Because that 9 percent penalty or bonus is calculated off of your revenue, we’re talking about a roughly $30,000 bonus or penalty to your net income, making it range from $370,000 to $430,000. For the practice in this example, the difference and cost of failing to adopt MIPS versus maxing out the bonus is roughly $60,000:

.09 x ($1,000,000 x 1/3) = $29,700

That’s approximately a 15 percent revenue difference. But for any practice, all you have to do is multiply the percentage of your revenue from Medicare by .09 to see what the impact is.

Private Payers Could Adopt Similar Models

MIPS applies only to Medicare and Medicaid reimbursement, but don’t be surprised if private payers follow federal payers’ lead. “Medicare serves as a predictable indicator of where other carriers are going to go and how they establish relative value,” explains Penny Noyes, president, CEO and founder of Health Business Navigators in Bowling Green, Ky., who presented at the Medical Group Management Association (MGMA) annual meeting last fall.

If that happens, the stakes for value-based reimbursement become much higher. Take the practice from the previous example, with $1 million in revenue and $600,000 in overheard. If you apply the 9 percent penalty or bonus to the revenue, that becomes $90,000. With $400,000 in profit, the same practice could find itself looking at a new net revenue range of $310,000 to $490,000, a whopping 22.5 percent difference in either direction. And that could make or break your practice long-term.