The 10% That Roared: CMS Adds Cost to 2018 MIPS Reporting Categories

This is how CMS sees us. They see us as a bunch of leaky toilets, and they want to know where the expense is going.

Ezequiel Silva III, MD
Chair, Economics Committee, ACR
December 20, 2017

In January 2018, physicians will receive a positive, negative, or neutral update in their Medicare reimbursement rates based on their final score calculated from 2016 data for the Merit-based Incentive Payment System (MIPS).

Although CMS gave no indication in the proposed 2018 Medicare Physician Fee Schedule (MPFS) that cost would be included in the 2018 calculation—along with quality, improvement activities, and advancing care information categories—the 2018 MPFS Final Rule allotted 10% of the total score to where radiologists fall on the cost spectrum.

What that means—at both the macro- and microeconomic levels—was the topic of a very interesting talk given by Ezequiel Silva III, MD, at the 2018 annual meeting of the Radiological Society of North America.

Many of the quality measures developed for radiology are process measures rather than outcomes measures, and they are largely topped out. In a setting in which all radiologists are performing at a high level of compliance on quality, a high score on the seemingly minor 10% cost category could determine whether a physician receives a positive, negative, or neutral reimbursement update.

It is true that MIPS is likely to change—perhaps sooner than expected with CMS Administrator Seema Verma and MedPAC among the critics—but cost measurement is not going away, Silva assured: “It is in the legislation, it’s in the regulations, it’s taking place.” Also, as he repeatedly stated, what something costs is a fair question to ask.

Silva said that radiologists will be challenged to do three things: develop outcomes measures, become fluent in the complex domain of quality measurement, and work with hospital partners and clinicians to understand and then manage the cost of the care they are delivering. 

“I am of the belief that we can’t do this alone,” he said.

Process to outcomes

Silva had a good explanation for why radiology’s measures are process oriented: “When the physician quality reporting initiative came into effect, it had to be a process that CMS could validate from claims.” The law was passed late in 2006 and operationalized by July 2007, so CMS had just six months to create a measurement mechanism.

Noting that CMS’s Verma has recognized the limitations of process measurements, he said: “If we are in a climate where process measures are no longer enough, then we need to find outcome measures.” 

Additionally, ccontractors and other third parties are looking at the ACR’s Qualified Clinical Data Registry (QCDR) and all QCDRs and wondering if the process measures they find there are good enough. “It’s a real challenge for our specialty to come up with what those [outcomes measures] are going to be,” he said.

It also makes sense to focus on measures that the specialty does not do well on rather than those it aces. To illustrate this point, Silva used the measure requiring that radiologists avoid the use of Bi-RADS 3 on a screening study in which a probably benign lesion is found.

“We do really well on this measure, greater than 98%, he said. “The standard deviation to be identified as someone who does really well is about 6.6%. Therefore, to do it really well and receive a higher score, you have to do it 104-plus percent of the time—it’s just not mathematically possible.

“Let’s find measures where the benchmark is low or create a measure where the benchmark is low,” he said. “You want to find measures that differentiate quality—if everyone is doing it, then maybe it’s not necessarily a differentiator on quality.”

Dawn of the cost score

Putting on his policy hat, Silva explained that as currently designed, MIPS gets off to a gradual start in 2017 when every physician will receive a score between 1 and 100 under MIPS. In 2017, the threshold for receiving a bonus is just one measure on one patient by one physician (for a total of three points). The threshold score increases to 15 in 2018.

Although a 5% adjustment is in play for 2018, the actual potential positive adjustment will be less than that. “The reason for that is the scaling factor,” Silva said, explaining that in the budget neutral system, the winners are paid by the losers. “If you are at a threshold of 15 and 3, there are not a whole lot of losers and there is not a lot of money in the pot to pay those winners. The scaling factor adjusts for this disparity. ”

The 2018 formula is as follows: quality 50%, cost 10%, improvement activities 15%, and advancing care information 25%.  Most radiology practices can be exempted from the latter category, which bumps quality up to 75%. Because it was not included in the proposed 2018 MPFS, cost was not expected to be included in the 2018 MIPS formula by policy watchers. Silva acknowledged that organized radiology anticipated having more time to prepare for cost scoring.

CMS’s decision to not implement a number of proposed episode cost measures likely factored into the decision to get started on cost, Silva said. MACRA requires that cost be scored in 2019 at 30 points, so instead of asking physicians to make a big jump in 2018, it has initiated a smaller, incremental step in 2017.

“It’s a huge change,” he said.

The decisive 10%

Silva suggested that cost could be the deciding factor in whether a physician receives a positive or negative adjustment, because most radiologists are expected to do well on quality and improvement activities. If economics is not enough to engage physicians in these activity, then they should consider the public relations implications of receiving a negative score on the Physician Compare web site.

“How willing are we to do nothing under this system?” Silva asked. “For us to stand back and say, ‘Forget that, I’m not doing this 10% cost thing because that’s not really right for CMS to do,’ I don’t think we can take that stance. I think it is a fair question to ask: How much does it cost?”

Silva shared an anecdote about his water bill: “My wife called me at work and she said, ‘Honey, have you been watering the lawn too much? I just got the water bill and we used three times as much water in October 2017 as we did last year’.” Silva got on the phone, called the San Antonio Water District and was told: “Get a plumber in there, you’ve got a leak somewhere.”

“This is how CMS sees us,” said Silva. “They see us as a bunch of leaky toilets, and they want to know where the expense is going.”

Reading your QRUR

CMS is already scoring physicians on cost using the value modifier. The score is contained in a document called the Quality Resource Use Reporter, which defines value as quality divided by cost. To understand how cost is calculated, Silva highly recommended that radiologists ask their business manager for a copy of their QRUR for 2016.

Using the QRUR from his own practice, South Texas Radiology Group (STRG), as a guide, Silva said: “This is all in the public domain, I am not violating any confidentiality. I’m sharing this with you because I think this is something we should all be doing.”

Midway down the first page, is a colorful graph that plots all physician performance and indicates whether a practice gets a positive, negative, or neutral adjustment. “Some are at four standard deviations above the mean,” Silva said. “They are spending a lot of money. This is a rich source of data, and I am not sure we know collectively where radiology is falling in the spectrum. We do know individually.”

On page three, the risk profile of a practice’s beneficiaries can be found. Silva was surprised to learn that his group’s risk profile was 86—anything over 75 has the potential to earn bonus points—and this is important data to have when you talk to hospital administrators and payers.  

Practices are measured on cost through two pathways: claims-based and condition or episode-based. Radiology is almost exclusively on the claims-based side, which refers to Medicare’s ability to look back on past billing claims, make cost determinations, and assign cost scores. “We get almost no condition-based scores, but it is evolving quickly and we are going to see some of these sooner than later,” Silva advised.

Surprise: You had five admissions

Silva’s practice is being scored exclusively on one claims-based measure: Medicare spending per beneficiary (MSPB) for every hospital admission assigned to its practice. This was another surprise for Silva: His group had 446 hospital admissions. The threshold to be scored is 35 under MIPS, and a cost adjustment is made at 125 admissions under the value modifier. 

Silva noted that 446 is more than three times enough to put STRG at risk of a negative Medicare update in 2018. “It means that 446 times a patient was admitted to a hospital, and during that admission, the number one billing provider NPI was someone in my group, was a radiologist,” he said.

Trauma, radiation oncology, interventional radiology, and stroke patients will put most radiology practices over the 125 admission criteria for a cost update. The admission for which you are responsible include not just the admitting physician services, but visits, procedures performed by other physicians, and days in admission. (The spreadsheet for Table 5C in the QRUR lists all patients attributed to the physicians in your practice.)

Five patients were attributed to Silva, and he shared relevant details of one patient, careful to exclude any personally identifiable information. Silva had read a CT for a patient who was admitted, placed a nephrostomy tube, and saw the patient post-procedure, day one. The patient was discharged two days later. “Sure enough, I was the highest billing provider,” he said. “There were some other things that were done on that admission.” 

Silva urged everyone in the room to study their practice’s QRUR.” I am not saying that we are going to look at 446 cases and that we are going to solve the cost conundrum,” he said. “What I am saying is that it is informative, it is data, it is easy to acquire, and there is no reason why these patients can’t inform our discussions.”

What you can do

An antidote to the sense of powerlessness you may feel after looking at your QRUR is to take some steps of your own, Silva said. 

Firstly, learn the lingo. You will be surprised at how few people are truly conversant in the language of cost in medicine. “If you walk into the administrator’s office and you are talking about MSPBs, and you are looking at index admissions, and you are talking about cost composite scores, and you can inform your discussion, it has an effect,” he said. 

Secondly, be aware of how you contribute to the cost of an episode of care. Silva said that the ACR commented to CMS on ten care episodes that did not get finalized. He chairs a episode-based cost revascularization committee that is looking at every CPT code, ICD-10 code, durable medical equipment, and every supply that goes into that episode of care to determine what the appropriate cost when patients are admitted with those conditions.

“I’m not sure it is going to happen next year, it might, but I think the smart, forward-thinking practices and researchers are going to look at those episodes and try to make some determinations about where we might be able to improve,” he said. 

Thirdly, make a philosophical decision to start. If you take a wait-and-see approach, the timeline to react is going to come pretty quick. “If you are on the wrong side of that negative adjustment, it’s going to be tough to take some action,” Silva said.

Finally, work with others to really make a difference. Silva said: “I love what radiology has to offer, I love some of the initiatives we have, but I think part of that philosophical discussion, and decision, is the ability to do this: Engage in teamwork and collaboration.” Working with the hospital and within your group practice on initiatives such as clinical decision support, novel informatics solutions, outcomes, and population health management. “I don’t know what the answers are,” Silva said, “but these are potential areas where we might be able to influence that.” 

­—Cheryl Proval 

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