By KIP SULLIVAN, JD

It’s official: the Medicare Payment Advisory Commission (MedPAC) has at long last decided that MACRA’s MIPS (Merit-based Incentive Payment System) can’t work.
MedPAC reached this decision at its January 12 and March 2, 2017 meetings.

Its principle rationale was that measuring “merit” (quality and cost) at the individual physician level, which is what MIPS requires CMS to do, is not possible. As one MedPAC staff person put it at the January meeting, “A redesign of the MIPS program should build off a clear-eyed assessment of the limit of the national Medicare program’s ability to assess clinician performance” (pp. 235-236 of the transcript  of the morning session of the January 12, 2017 meeting).

But the transcripts of the January and March meetings indicate that although MedPAC is now willing to say MIPS is a mess, the commission had not reached a decision about what to do about the mess by the close of the March meeting. The commission’s challenge is obvious. As its chairman Dr. Francis Crosson put it, the issue squarely before the commission now is “whether we just … sit there and watch a dysfunctional thing unravel, or whether we try to make some recommendations which are constructive….” (pp. 304-305, transcript, January meeting) In previous posts  I have argued that both parts of MACRA – the MIPS program and the Alternative Payment Model (APM) program – can’t work and that MedPAC should recommend that Congress repeal or drastically amend MACRA (the Medicare Access and CHIP Reauthorization Act). The only constructive recommendation I can think of, short of complete repeal, would be to eliminate MIPS and to reduce the APM program to a limited test of a few highly focused APMs, such as “medical homes” that focus on a few services (as opposed to every medical service sold in the Western World) or a few types of sick patients (as opposed to all Medicare enrollees).

But MedPAC’s commissioners and staff cannot bring themselves to propose eliminating MIPS, and they have not indicated any desire at this date to alter the APM program beyond throwing a few more dollars at the APM program. The only recommendations MedPAC appears ready to make are (1) to substitute three or four “population” level “quality” measures (such as “excess” hospital readmission rates) for the hundreds of “quality” measures MIPS currently uses, and (2) to penalize doctors who refuse to leave MIPS. But these recommendations assume the APM program will work – that APMs will be available for doctors to join throughout the country, and that those APMs will save enough money that both Medicare and participating doctors will benefit. That is an assumption based on faith, not evidence. When commission members questioned that assumption, the staff had no answers.

Thus, when the March meeting drew to a close, it was not clear what if anything MedPAC will say in its June report to Congress other than that MIPS can’t work in its current form.

In the remainder of this article I will review the commission’s indictment of MIPs and its staff’s proposed solution. In my next post I will describe the commission’s unproductive discussion about the solution.

Evidence-based diagnosis, faith-based solution

Here is how MedPAC staffer Kate Bloniarz summarized the commission’s indictment of MIPS at the March meeting:

To reiterate some of the issues with MIPS, first, MIPS uses hundreds of clinician-reported quality measures. Second, two of the other components of MIPS, meaningful use and clinical practice improvement activities, only require attestation by a clinician and haven’t been proven to correspond to high-value care. Third, for any given clinician, there are a relatively small number of Medicare cases, which can contribute to noisy performance. Fourth, under MIPS each clinician is judged based on their own set of measures that they reported, and so the results aren’t comparable across clinicians. In total, we don’t expect that MIPS will be able to identify high- and low-value clinicians and will not be useful for beneficiaries, clinicians, or the program. (p. 194 of the transcript  of the morning session of the March 2, 2017 meeting)

“Not useful for beneficiaries, clinicians, or the program!” That’s about as damning a statement as one can make about any program that was supposed to save money and make doctors better doctors. I applaud the commission for being so forthright. I do wonder why it took them so long to reach this conclusion. This conclusion was obvious even before MACRA was enacted, which was two years ago.

But if MIPS can’t work, doesn’t that mean MACRA can’t work? After all, MIPS’ reporting burdens and its threat of reduced income were supposed to chase doctors out of MIPS and into ACOs and other wonderful “alternative models” awaiting them in the APM program. And for the doctors who wouldn’t be chased out, MIPS was supposed to make them better doctors and thereby save money for Medicare. If Congress were to eliminate the reporting requirements and the “merit-based” rewards and penalties in MIPS, what would be left of MIPS? What would drive doctors into ACOs and other APMs?

The staff’s “solution” is not simply to abandon MIPS, but to amend it drastically and to amend the APM program slightly. The staff proposes to replace MIPS’ current reporting requirements with a few “quality” measures that CMS can calculate using claims data only (thus relieving physicians of the burden, imposed by MIPS, of reporting dozens of types of data to CMS), and to replace the insanely complex financial carrots and sticks in MIPS with a much simpler irritant: The threat of losing one or two percent of Medicare’s payments over the course of a year. If doctors don’t want to lose one or two percent of their income, they’ll have to do one of three things: Join an ACO or other APM, join a “virtual group” of doctors (who knows what that means?), or be assigned by CMS to a group defined by geography. In all three groupings, doctors would be subjected to a few “quality measures” that CMS could concoct with claims data alone. At the March meeting, staff mentioned the following “quality” measures as replacements for the hundreds MIPS uses now: “potentially preventable admissions, ED visits, mortality and readmission, patient experience, [and] some measure of healthy days at home.” (p. 214 of the transcript)

Here is how Ms. Bloniarz described the new MIPS at the March meeting:

In this new framework, all clinicians would contribute to a quality pool, let’s say a 1 percent 2 withhold. Clinicians would receive this withhold back if they joined an A-APM [advanced alternative payment model]. Then clinicians could be eligible for a positive or negative quality adjustment if they elect to be part of a clinician-defined virtual group or elect to be measured at a CMS-defined [geographical] referral area. These virtual groups or referral areas must be big enough to detect performance of the group as a whole on certain population quality measures. Clinicians who do none of these three things – join an A-APM, join a virtual group, or elect to be measured at a referral area – would lose the withhold. (pp. 192-193 of the transcript)

In addition to these changes, the staff proposes siphoning tax dollars out of the MIPS program and into the APM program to make MIPS less attractive and APMs more attractive. Specifically, the staff proposes “limiting the potential upside in MIPS and moving the $500 million MIPS exceptional performance bonus to … APMs….” (p. 190, transcript, March 2 meeting)

From the frying pan to the fire

The staff’s “solution” raises obvious questions, starting with:

Why, other than to avoid the new MIPS financial penalty, would physicians want to join an APM, a “virtual group,” or a geographically defined group;
would “virtual groups” and geographically defined “groups” be mere constructs on CMS computers, or would they actually function as organized entities, and if so, what would they do, and;
would APMs even be available for those physicians who want to join one?

This last question was the first one posed to the staff when the staff finished presenting its “solution” at the January meeting. Dr. Craig Sammit (a former HMO executive and now a VP with Anthem) asked: “So before weighing in on … the feasibility of revising the MIPS side, do we have a sense of how accessible and feasible it will be for clinicians to join APMs? … [W]ill it be feasible for every clinician who wants to be in an APM to get into an APM?” (p. 248, transcript)

MedPAC staffer, David Glass, could only offer these woefully inadequate responses: “Well, CMS seems to be wanting to make it very feasible for them to do it…;” “I guess it depends how it eventually works out;” and “I would say that’s a little hard to say right now.” (p. 249)

The conversation went downhill after that. I’ll describe the rest of the conversation in my next post.