CMS proposes new Medicare incentive payment system

Psychologists treating Medicare patients will need to follow new reporting process.

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule on a new Medicare payment model, the Merit-Based Incentive Payment System (MIPS). It was created under the Medicare Access and CHIP Reauthorization Act (MACRA), the 2015 law that repealed the Sustainable Growth Rate. MIPS is designed to change the current payment structure in Medicare so that the focus is on value rather than volume.

MIPS combines key facets of three current programs in Medicare: the Physician Quality Reporting System (PQRS); the Value-Based Payment Modifier (VM), which compares quality of care to cost; and the Electronic Health Record (EHR) incentives, often referred to as "meaningful use". Psychologists have been eligible to participate in PQRS since its inception in 2007 but are not subject to the VM or meaningful use.

MIPS will impact Medicare payments by assessing clinicians on four categories and then assigning a composite score. The composite score will be compared to a threshold score. Those falling below the threshold score will incur a payment penalty, while those scoring above the threshold will receive a bonus. 

The four performance categories under MIPS and their percentages of the composite score for the first year are:

  • Quality: Much of this category includes measures from the current PQRS program. Clinicians will have to choose six measures, including one outcome measure and, if they treat patients face-to-face, a cross-cutting measure. Cross-cutting measures tend to involve screenings (e.g., alcohol, tobacco use) and can be used by many different health care professionals. They are already a PQRS requirement. Quality counts towards 50 percent of the composite score.
  • Advancing Care Information: These are customizable measures that focus on demonstrating the use of certified EHR technology. Requirements are designed to be more flexible than those applied to meaningful use. This category is 25 percent of the composite score.
  • Clinical Practice Improvement Activities (CPIA): Focused on areas such as care coordination, beneficiary engagement and patient safety, CPIAs emphasize activities that have a proven association with improved health outcomes. CPIAs will carry a different number of points; for example, medium-level activities will be worth 10 points and high-level activities 20 points. CMS is proposing that clinicians acquire 60 points in CPIAs, with special consideration given to clinicians in small practices (15 or fewer) or those in rural areas and geographic health professional shortage areas.

    To collect points, clinicians select from a list of over 90 options, including a subcategory on integration of primary care and behavioral health. This subcategory will include measuring such factors as co-location of behavioral health and primary care services, shared/integrated behavioral health and primary care records, or cross-training of MIPS-eligible clinicians or groups participating in integrated care. This subcategory also includes integrating behavioral health with primary care to address substance use disorders or other behavioral health conditions. The CPIA category makes up 15 percent of the composite score.
  • Cost / Resource Use: Information will be taken from claims, eliminating the need for clinicians to do any reporting in this category. In measuring resource use, CMS will use per-patient total allowed charges for all services under Medicare, as well as other measures of allowed charges and measures of utilization of items and services. Clinicians would be assessed based only on resource use for their Medicare patients. Cost would represent 10 percent of the composite score. The percentages for each category may change and CMS can vary the weights for specialties that lack applicable measures in a given category.

Impact on Psychologists

So what does all this mean for psychologists in Medicare?

Psychologists and certain other nonphysicians are expected to begin MIPS reporting in 2019 and will not be required to report quality measures in 2017-18. MIPS adjustments will be applied to psychologists’ Medicare payments starting in 2021. If psychologists do not report any measures under MIPS once they become eligible, they will end up with a very low composite score and may see significant reductions in their Medicare payments.

Recognizing that clinicians such as psychologists may find it challenging to resume reporting in 2019 after not reporting for two years, CMS will allow the specialties currently excluded from MIPS to continue voluntarily reporting quality measures and gain experience with the new program. This reporting can be done through claims, registries and EHRs. Psychologists who choose to continue reporting quality measures will not see any MIPS payment adjustments, regardless of their performance.

Psychologists are urged to consider reporting quality measures in 2017-18 to gain experience using the new model. Once added to MIPS, psychologists will need a composite score above the threshold to earn a bonus. Anything below the threshold will trigger a reduction in payment. Bonuses under MIPS will be 4 percent in 2019, 5 percent in 2020, 7 percent in 2021 and 9 percent in 2022 and beyond, along with the opportunity to receive additional rewards for exceptional performance. Negative adjustments will be at these same levels. 

Members with questions about PQRS and MIPS can contact government relations staff in the Practice Organization.