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CDI Insights

The Merit-Based Incentive Payment System

MIPS is an important acronym for health information and clinical documentation professionals to understand.

The Merit-Based Incentive Payment System (MIPS) is an important acronym for health information and clinical documentation professionals to understand. MIPS consolidates several value-based performance standards to promote the movement away from volume-based care and toward high-quality, cost-effective care.

MIPS was introduced in the Medicare Access and CHIP Reauthorization Act of 2015. It brings together the Physician Quality Reporting System (PQRS), Value-Based Payment Modifier (VBPM), and Meaningful Use (MU) incentive program. As part of the law to repeal the Sustainable Growth Rate (SGR) as of July 1, 2015, MIPS will take effect on January 1, 2019.

In this month's column, we discuss MIPS, clarify industry confusion, and answer several key questions for both HIM and CDI professionals.

Q: What do physicians need to know about the SGR and why it was ultimately repealed?

Fee: The original goal of the SGR was to control costs within Medicare for physician professional services. It based physician payments on predicted healthcare expenditures. However, over time, the difference between actual and predicted expenditures continued to widen. To compensate for this difference, CMS proposed to significantly cut physician payments annually. Yet, each year, the physician fee schedule update was either suspended or only slightly adjusted by Congress. These "doc fixes" did not account for rising healthcare costs. MIPS, a pay-for-performance system, is designed to foster lower costs and higher quality care.

Q: Does MIPS actually replace the PQRS, VBPM, and MU?

Fee: Yes, it does. MIPS is a federal quality program that combines each of the three quality incentive payment programs into a single program. Under MIPS, high-performing providers are rewarded, and low-performing providers are penalized. MIPS uses data collected during 2017 to determine potential payment adjustments in 2019. Penalties and incentive payments are based on a composite performance score that incorporates these four key performance measures:

•    Resource use. Does the provider use the appropriate level of resources for a particular episode of care?
•    Meaningful use. Is the provider compliant with quality measure reporting via certified electronic health record technology?
•    Quality. Does the provider submit various quality measures, some of which are based on MU, PQRS, and VBPM?
•    Clinical practice improvement. Does the provider participate in activities, such as alternative payment models, to improve clinical practice?

Q: Where do the MIPS and CDI intersect?

Fee: The most obvious intersection pertains to the risk-adjusted VBPM which takes into consideration hierarchical condition categories (HCC). It's important for physicians to begin capturing any and all HCCs, as this will eventually affect their MIPS composite score. However, these HCCs also play a role in risk-adjusted payments from Medicare Advantage plans.

In fact, organizations seeking to expand their CDI programs into the outpatient arena have started to look specifically at HCCs for this reason. It's important to note that in addition to documenting the specific HCC, physicians must also ensure clinical validation, meaning there must be evidence in the record of a physician's monitoring, evaluation, assessment and treatment of the condition.

Bonney: The only caveat is that to do this effectively, you need technology. That's because on the outpatient side, the volume is so significant. Without technology, it's virtually impossible to monitor for each and every clinical indicator that could denote an HCC.

Q: Why do physicians need to pay attention to MIPS now?

Fee: Documentation improvement takes time. MIPS, like many other pay-for-performance programs, uses retrospective data. For example, MIPS uses data collected during 2017 to determine potential payment adjustments in 2019. Negative payment adjustments will be distributed as follows, depending on whether a provider's composite score falls below a particular performance threshold: 4% in 2018, 5% in 2019, 7% in 2020, and 9% in 2021 through 2023. Above-par performance could earn a physician a bonus as high as 12% in 2018 and 27% by 2021. These adjustments can result in a significant difference in terms of payment.

Bonney: We've been working on an outpatient CDI tool, and HCCs are a large component of that. However, in addition to tracking HCCs, you also need to be able to track and trend physician performance.

Fee: I agree. Peer-to-peer comparison will be important for MIPS, but it's also vital now-with Medicare Advantage. These plans are typically specific to each physician group. So if you have 20 physicians in a group, you'll want each of those 20 physicians to maximize risk in the plan. One expensive member of the plan can take down the whole plan. I've had conversations with medical directors of Medicare Advantage plans who say they won't include physicians who don't capture risk appropriately.  

Q: Why else is technology necessary to ensure success with MIPS?

Fee: In ICD-9, there were four codes that mapped to HCC 106. According to the preliminary ICD-10 maps, there are 127 codes included in HCC 106. If you don't have technology to assist with this, how will you be able to track it?  

Bonney: Technology is critical; however, the biggest challenge is simply building an affordable tool particularly for the smaller and independent practices. Our business focuses mostly on the larger or hospital-owned practices. There are opportunities for Intelligent Medical Objects (IMO) and others to assist the smaller practices with low-or no-cost tools. Outpatient EHR vendors may offer tools to help these practices.

In addition, there are opportunities for mobile technology in this space. Even if these mobile tools don't specifically assist with HCC capture, they could help indirectly with ensuring accurate and complete documentation.

Q: What effect do you think MIPS will have on the smaller or independent practice specifically?

Fee: Some practices are joining clinically integrated networks and ACOs. I think we'll see more of this going forward. Other practices will create their own tools to assist with HCC capture. I know of at least one practice that created an HCC tool using a local database to calculate a risk score for each patient.

Q: What should physicians be thinking about between now and 2019 when MIPS goes into effect?

Fee: There is a big concern right now that with the proliferation of EHRs and ICD-10, physicians will assign very specific codes, but the record won't include any documentation to support those codes. I suspect that compliance reviews and coding audits will become even more important than they are today.

Bonney: We are already getting requests to build automated workflows that help hospitals monitor documentation in ICD-10. For example, one client asked us to flag cases for which every fourth character is a particular body part so they could manually review these cases. As organizations begin to perform ICD-10 audits, these requests will only likely continue to grow.

Q: Do you think that MIPS will be effective in the long run?

Fee: It's hard to say. If it's done correctly-and the reporting is streamlined-it will hopefully have a positive outcome. It also needs to be comprehensive, meaning it should include requirements for board certification. If it's done correctly, it will be a well-rounded program and something that physicians will probably buy into. However, some physicians could simply say, "I'm not taking any Medicare patients." Concierge medicine is also on the rise. So it will be interesting to see how it all pans out.

Bonney: Larger, hospital-owned practices will probably have more success with MIPS than their smaller, independent counterparts. However, MIPS will also likely drive consolidation and/or ACOs and other alternative models. Will MIPS be successful? There's certainly enough available incentive money to gain physicians' attention, but only time will tell.

Steve Bonney is responsible for business development and product strategy at RecordsOne. He is a national author and speaker on the use of natural language processing technology in healthcare. He works hand in hand with hospitals to identify new and innovative uses for NLP within coding, clinical documentation improvement, quality reporting and reimbursement. Bonney is an active member of AHIMA, ACDIS, HIMSS and WEDI.

James P. Fee, MD, CCS, CCDS, is vice president of Enjoin. He is board certified in Internal Medicine and Pediatrics and maintains a clinical practice in hospital medicine. Dr. Fee is an AHIMA-approved ICD-10-CM/PCS trainer and serves in a consultative role regarding clinical documentation integrity and its impact on financial accuracy, physician and hospital profiling, and quality metrics.

CDI Insights Archives

Nice job bringing more needed awareness regarding MIPS. As an additional resource, check out our MIPS FAQs currently ranked #1 on Google:

Tom Lee,  CEONovember 29, 2015
Chicago, IL


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