The Centers for Medicare & Medicaid Services (CMS) has released its much-anticipated Calendar Year (CY) 2018 Quality Payment Program (QPP) Final Rule. In this final rule, CMS details changes to both the Advanced Alternative Payment Models (APMs) track and the Merit-Based Incentives Payment System (MIPS) track of the QPP.

CMS says it expects this program to, “Modernize Medicare to provide better care and smarter spending for a healthier America.” We at Applied Policy think that the bonuses physicians can earn and the penalties they face under this new set of rules are too modest to drive better care or smarter spending.

What might this mean to you? We’ve spent a fair amount of time over the last week poring through the 1,653-page QPP rule (in addition to the thousands of pages of other rules CMS has churned out already this month). Here’s what you need to know about this latest, and final, rule:

• Medicare excludes most clinicians from the Merit-Based Incentive Payment System
• On average, participating clinicians will receive a 1 percent payment increase and only about 3 percent of clinicians will get a negative payment adjustment
• Medicare expects fewer than 5 percent, or about 70,000, clinicians to take part in its Advanced Alternative Payment Models
• Congress expects incentives for smarter spending to count toward 30% of MIPS performance scores in 2019, but for 2018 CMS used its discretion to limit that part to only 10%

Around 60 Percent or Over 900,000 Clinicians to be Excluded from MIPS

In the final rule, CMS estimates that over 900,000 clinicians out of about 1.5 million are going to excluded from participation in MIPS. These clinicians, which represent around 60 percent of Medicare Part B billers, are excluded through the low-volume threshold, participation in an Advanced APM, being a newly enrolled clinician, or being a type of clinician not included in the first QPP performance years.

The final rule also finalizes CMS’ proposal to increase the low-volume threshold to exclude individual MIPS participants or groups with less than $90,000 in Medicare Part B charges or participants and groups who see less than 200 Part B beneficiaries. CMS expects that more small practices and eligible clinicians in rural and Health Professional Shortage Areas (HPSAs) will now be exempt from MIPS participation. Additionally, groups of 15 or fewer physicians are eligible for up to 5 bonus points on their final score, and can form a virtual group to meet their quality performance goals.

Incentives for Smarter Spending Stay Weighted at 10 Percent in 2018, Will Jump to 30 Percent in 2019 and Beyond

For the second year of MIPS, CMS is finalizing weighting the cost performance category to 10 percent of a participant’s total MIPS final score. This is a decrease from the proposed 30 percent weighting; however, in the third year of the program (2020) and beyond, the weighting will be 30 percent for the Cost Category. For measures, CMS is finalizing the inclusion of the Medicare Spending per Beneficiary (MSPB) and total per capita cost measures to calculate the Cost performance category score. These two measures carried over from the Value Modifier program and are currently being used to provide feedback for the MIPS transition year. CMS will continue to calculate cost measure performance from claims data, so no action is required from clinicians to report these measures.

Additionally, CMS has spent the past year collecting stakeholder input to develop better tailored episode-based cost measures. Therefore, CMS will propose new cost measures for 2018 in future rulemaking and the 10 episode-based cost measures in 2017 that participants will receive feedback on with respect to their performance will not be carried forward into 2018 or beyond.

If you are wondering how this could impact you or your practice, please contact Jim Scott at jscott@appliedpolicy.com or 202-558-5272.