Four Consequences That Will Derive From MIPS

April 5, 2016

The Merit-Based Incentive Program could mean more practice buyouts and increased complexity between Medicare Parts A and B.

David Wofford, senior manager for ECG Management Consultants in San Diego, has identified several potential unintended consequences the MIPS program may have:

1. Physician practice consolidation and acquisitions will continue. It is not getting any easier to survive as a private practice. That is nothing new, but MACRA layers on another element of complexity and uncertainty. "Being able to perform well under these incentives is going to require the commitment of resources that a lot of these doctors don't have," Wofford says. He spoke on this topic at a medical association meeting a few months ago, and that was a recurring comment from the audience. One physician told Wofford: "For us to succeed under this, it is going to require a commitment of resources just in order to avoid penalties. Where is the money for this investment going to be coming from?"

Because there is a stated emphasis on outcome measures and achieving outcomes requires collaboration across care settings, Wofford says integrated delivery systems are going to be in a better position to achieve strong results. "I don't think it would be unreasonable to assume the government is envisioning an environment in which the doctors are predominately system-employed and perhaps somewhat protected from these incentives, so it is really the health systems that CMS is trying to influence, under the assumption that the health systems are taking the risk for the facility and professional fees and this would leave it up to the health systems to incentivize individual doctors."

2. Understanding the relationship between Medicare Parts A and B will become more complicated. Some incentives will target cost of care for episodes based on diagnoses, Wofford says. So if you are a health system employing your doctors, there are going to be very sophisticated analytics you would want to do to understand how performance under Part B - particularly the resource utilization incentive - will affect reimbursement under Part A. "For instance, he adds, "does the penalty outweigh the revenue they get from having a readmission? What is the interplay of all these things? Most organizations are going to be struggling to figure that out."

3. Physician compensation and service agreements will need to evolve. It is expected that MIPS will be driven by outcomes-oriented measures. Wofford explains that if you look at the care process that needs to occur in order to influence those metrics, there is interplay between many different entities. For instance, there is discharge planning, care coordination, and making the clinical data available across inpatient and outpatient settings. All of that activity is what is going to keep people out of the hospital and keep your readmission rates low, but how much of that is actually performed by the doctor? "Doctors will tell you they have very little to do with that," he says. "So you have to figure out to what degree you want to place them at risk for these things. Do you put them at risk for the outcome? Or do you try to distill it down to the specific behavior they can influence that plays a part in all of that? That is going to be a real challenge to figure out."

4. Commercial contracts will need to be amended. If Blue Cross pays you 150 percent of Medicare, they are going to have language relating to a fee schedule, Wofford notes. "Is it 150 percent of the unadjusted rate? Or of what the provider gets based upon their performance? Then you have to determine which year they are talking about." There is probably going to be a two-year lag between performance and the actual penalty or reward from Medicare. If you have a commercial contract tied to that percentage of Medicare, which time period are we looking at? It is going to require adjustment of some of that language, he adds.