September 2018 Edition Vol.11, Issue 9

MIPS Creates a Stir in the Real World

By Christina Bennett, MS

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) may have ended the sustainable growth rate, but it also ushered in the Merit-based Incentive Payment System (MIPS), which only in its second year, has already generated a spectrum of criticism and calls for reform. Such a reaction, however, may not be entirely surprising, as MIPS is largely a composite of three historic programs that each had problems of their own even before CMS established the new payment track under its Quality Payment Program.

According to Paul B. Ginsburg, PhD, Director of the Center for Health Policy at USC-Brookings Schaeffer Initiative for Health Policy, “MIPS is failing, in a sense, because the components of MIPS were failing before MIPS started.”

Although the Medicare Payment Advisory Commission has remained steadfast in their stance to scrap MIPS and replace it with the new Voluntary Value Program, no action has been taken to eliminate MIPS.1 For now, MIPS is here to stay, and the first payment adjustments are slated to hit in 2019 based on 2017 reporting measures.

“My sense is that in Congress, they have not been interested in revisiting MIPS because they are so relieved of what they accomplished with MACRA, and that [any] important policy changes will likely come from CMS rather than from legislation that comes out of Congress,” said Dr. Ginsburg.

Safeguarding Against Unintended Effects

As is the case with any new policy, there are intended effects and potential unintended effects. Concern about unintended consequences of MIPS has been expressed across several aspects of medicine, from the incentive to avoid sicker patients to the consolidation of private practices.

Barbara L. McAneny, MD, president of the American Medical Association, cautioned that MIPS may unintentionally penalize physicians who are in smaller towns, rural communities, and intercity areas with significant health disparities because their clinical outcomes will not be as favorable as those for physicians in areas with high health literacy. The result could be physicians leaving those already underserved areas for healthier, more affluent patient populations to perform well in MIPS and avoid financial penalties. “The health care of the nation, as a whole, depends on physicians willing to work in areas with sicker, poorer patients and be rewarded, not penalized,” she said.

Physicians are also faced with increasing administrative burdens, not just from MIPS but from other causes, like billing and prior authorization requirements. This administrative burden, Dr. McAneny explained, is contributing to physicians leaving the profession entirely or moving from private practice to a hospital, where the physician will cost the system significantly more.

“[MIPS] is a relatively new program,” added Dr. McAneny. “It is unrealistic to expect that a brand-new program that’s just getting implemented will have gotten everything right the first time around.”

Additional unintended effects of MIPS were recently published in a study in Health Affairs.2 Researchers surveyed a group of physicians during the first year of MIPS reporting to understand how physicians might alter their behaviors while in MIPS. They found that most of the physicians surveyed believed MIPS could encourage physicians to focus more on the aspects of care being measured than those not measured and incentivize physicians to avoid sicker or more medically complex patients. More than one-third of those surveyed believed that physicians would be prompted under MIPS to dissuade patients from utilizing care in situations when it might be appropriate.

“Policy makers have to really safeguard against these potential, unintended effects in MIPS,” said lead author Joshua M. Liao, MD, MSc, associate medical director of contracting and value-based care at University of Washington School of Medicine.

The Reality of MIPS in Oncology

While almost one million physicians are exempt from MIPS reporting, oncologists not participating in the Oncology Care Model (OCM) are for the most part participating in full MIPS reporting, as they easily meet the threshold criteria for participation by treating so many Medicare beneficiaries.3 As a result, many oncology practices are seeing MIPS reporting first-hand and the inherent challenges.

“Transitioning into MIPS, for the most part, has been fairly seamless because we were very active in reporting for Meaningful Use and PQRS,” said Rhonda Henschel, director of managed care and quality at Minnesota Oncology. Minnesota Oncology is participating in full MIPS reporting.

MIPS streamlined the three previous quality reporting programs, Physician Quality Reporting System, Meaningful Use, and Value-Based Payment Modifier, into one reporting system that scores providers based on four domains that carry different weights: quality, cost, improvement activities, and promoting interoperability.

Some of the biggest adjustments with MIPS reporting, Henschel said, was the added emphasis on practice improvement activities and increased expectations for overall performance. Because a practice’s overall performance is compared with other practices on a national level and poor performance could lead to financial penalties, practices are under pressure to continuously improve. Prior to MIPS, practices had benchmarks for the year and worked towards meeting those. “Now it’s this continuous drive to stay ahead of the nation and how they’re performing,” said Henschel. “It takes constant effort and focus.”

A common criticism of MIPS has been that the set of quality measures oncologists can select from are not relevant to the specialty. Oncologists must select a set of six quality measures to report on for the entire 12-month reporting period. “There are some [measures] that are definitely relevant to oncology patients, but I think there’s a lot of opportunity for continued refinement and making those [measures] more meaningful,” said Henschel. “Right now, it’s lacking.”

Perhaps the most prominent concern among oncologists is the cost category. During the 2017 transition year, the cost category had no influence on overall MIPS score; but for the 2018 reporting period, 10% of the overall MIPS score is based on cost, which includes prescription drugs and services. “The cost, you can’t meet it,” said Robin Zon, MD, medical oncologist and vice president at Michiana Hematology-Oncology in Indiana. CMS calculates the score for the cost category from claims data. “All you can try to do is contain the cost as much as you can without jeopardizing care.”

Cost of care is beyond an oncologist’s control because not only does it include drug and diagnostic costs, but also costs that are unrelated to the care an oncologist provides. For example, an oncologist may have a patient with breast cancer who then has a car accident and breaks an arm. Those incurred healthcare costs to treat injuries from the car accident are pinned on that oncologist, hurting their cost score.

“They’re asking our field in oncology, which is a very costly field because of the price of drugs and diagnostics—more so than other fields—to basically bear the brunt of that in terms of the cost calculation,” said Dr. Zon.

The cost category is expected to eventually make up 30% of the MIPS score; the 2019 Medicare Physician Fee Schedule proposed rule is encouraging such a trajectory by raising the cost category from 10% to 15% for year three.4 ASCO expressed concern over the proposed increase, particularly given that the methodology for score calculation remains the same.5

Furthermore, to track in real-time how a practice is performing on cost, as well as on the other MIPS categories, it must be supported by up-to-date technology. The issue, however, is that quality measures change each year and the reprogramming of the technology that needs to happen is beyond the practice’s control.

“As a practice, you really don’t control that. You have vendors that assist you with those different pieces,” said Henschel. “It’s kind of like you’re always playing catch up because you find out what the expectations are from Medicare and then you have to get together and make a plan for how you’re going to address that.”

“I think there are a lot of challenges with MIPS. I don’t think anyone necessarily enjoys reporting it or having to do the constant work involved in it,” said Henschel. “But there are some positive things that do come out from this and that’s where it makes you take a reflective lens and look at what your weaknesses are and your opportunities for improvement.”

Henschel added, “The key is really finding those MIPS components that are relevant to oncology and add value to the patient experience.”

Drug Costs Threaten Oncology Care Model

Rising drug costs are a major concern not only for practices participating in full MIPS reporting, but also for those in the Oncology Care Model (OCM) pilot program. A practice’s future participation in the program depends on their ability to control costs, which in cancer care are largely determined by prescription drugs.

Aaron Lyss, director of strategy and business development for Tennessee Oncology, said that his biggest concern with OCM is how drug costs are treated in the performance-based payment methodology. In OCM, performance-based payments are calculated based on quality measures and cost of care, and practices only receive the payments if they deliver care under the target benchmark. Tennessee Oncology currently participates in one-sided risk of the OCM, and Lyss stressed that earning performance-based payments is going to be “incredibly” challenging without an adjustment to the payment methodology that better accounts for the rising cost of drugs.

OCM participants who do not achieve a performance-based payment by the fourth performance period will be forced to either exit the program and enter full MIPS reporting or move to two-sided risk. In two-sided risk, practices can earn a 5% bonus on all Part B fees but are also held more financially responsible for Medicare costs that exceed the target benchmark. If Medicare costs exceed that target benchmark, the practice may be penalized up to 20% on not just Part B fees but total cost of care. Incurring such a penalty can potentially cause significant financial hardship, even bankruptcy, for a practice.

“That bonus is completely out of balance with the financial uncertainty of two-sided risk in OCM,” said Lyss. If two-sided risk were based on reducing costs associated with hospitalizations, emergency department visits, post-acute care, and other areas of healthcare expenditures that can be mitigated through better care management, a practice’s view of two-sided risk could change. Lyss said Tennessee Oncology could consider that type of arrangement because they have already been successful in reducing costs in those areas, but data and experiences from other cancer care organizations do not support moving to two-sided risk at this time. “The drug costs are out of our control, so it wouldn’t be practical to be in two-sided risk under the current incentive structure,” he advised.



  1. Report to the Congress: Medicare Payment Policy. Medicare Payment Advisory Commission. March 2018. Accessed August 20, 2018.
  2. Liao JM, Shea JA, Weissman A, and Navathe AS. Physician perspectives in year 1 of MACRA and its Merit-Based Payment System: a national survey. Health Affairs. 2018;37(7):1079-1086.
  3. USC-Brookings Schaeffer Initiative for Health Policy. Can MIPS be salvaged? Accessed August 20, 2018.
  4. American Society of Clinical Oncology. 2019 Physician Fee Schedule and Quality Payment Program proposed rule released. Accessed August 20, 2018.
  5. American Society of Clinical Oncology. As MACRA heads toward third year, Congress urged to consider how proposed CMS changes will impact Medicare beneficiaries with cancer. Accessed August 20, 2018.

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