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MedPAC Highlights Flaws in MIPS Design; Urges Immediate Repeal

October 06, 2017

After its analysis of the Merit-Based Payment Incentive System (MIPS), the Medicare Payment Advisory Commission (MedPAC) is urging the immediate repeal and replacement of the new payment system introduced as part of the Quality Payment Program (QPP) required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

MedPAC members are physicians, executives, and other health care experts. MedPAC is charged with advising the U.S. Department of Health and Human Services about policy issues related to the Medicare program.

The QPP, which is comprised of two paths, the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APM), is intended to help transition clinicians from Medicare payment based on volume to payments based on value.

In its report, MedPAC lists several concerns with the current design of the MIPS including:

  • The focus on process-oriented measures, such as following pathways rather than patient outcomes
  • The ability for clinicians to choose which measures they participate in which may result in clinicians selecting measures in which they already perform well
  • A measure category that relies solely on clinicians self-reporting activities, likely resulting in high scores for this measure across all clinicians, therefore not providing differentiation in performance
  • The significant cost required to report and track MIPS measures, estimated by MedPAC to be in excess of $1 billion during 2017

The proposal under consideration would repeal MIPS, resulting in all Medicare physicians not in an APM to have a two percent withhold in Medicare payments. In this proposal, clinicians would be able to choose between two options:

  1. Participate in a new, claims-based payment model measuring performance-based measures such as mortality rates or rate of per beneficiary spending following hospitalization, or
  2. Remain in fee-for-service (FFS) without the ability to earn the two percent back

While MedPAC commissioners support the repeal of MIPS, none of the panel members support the proposal for replacement as it currently stands, citing the risk that clinicians may choose to forgo the two percent and stay in a FFS model, or that clinician groups formed under the new model may prevent some clinicians from joining the group, thus blocking their opportunity to earn the two percent back.

MedPAC staff plans to continue to work through the proposal and plans to present draft recommendations during December.  If approved, the recommendation will appear in the annual March MedPAC report.

HAP will continue to monitor developments related to this proposal.

Please contact Kate Slatt, HAP’s senior director, health care finance policy, with any questions.

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