Risky Business

Medicare’s Merit-based Incentive Payment System (MIPS) is an episode-based scoring system within Medicare that evaluates the amount of reimbursement physicians receive for 19 pre-developed episodes of care; these range from elective arthroplasty to the inpatient management of intracranial bleeds. This scoring system is based off four weighted components: quality of care (45%); correctly using the EHR system with respect to information transfer and interoperability (25%); engaging in improvement activities such as shared decision making, patient safety, or care coordination (15%); and the overall cost and resource utilization (10%). Based on the score received, physicians or physician groups are given a reward (higher reimbursement) or a penalty (decreased reimbursement).

Currently, the cost component of the MIPS score includes, among other variables, adjustment for illness severity (community acquired pneumonia vs. hospital-acquired pneumonia), patient medical complexity, and reason for Medicare eligibility. However, there is no adjustment made for social risk factors such as income, education, unemployment, housing, etc. Previous studies have shown that patients with the greatest burden of social disadvantage incur higher health care costs, and thereby, physicians caring for the most at-risk patients receive lower MIPS scores. The question then becomes: do clinicians caring for patients with greater social disadvantage receive appropriate reimbursement?

Sandhu et. al. evaluated the effect of community-level social factors on the average, episode-specific cost of care. After adjusting for social factors in multiple models for eight key episodes of care (five procedures, two disease processes, and one screening procedure), the authors found that fewer than 4% of clinician groups experienced more than a 10% increase in the cost of care for these particular episodes of care.

The MIPS episode-based cost scoring system accounts for the clinically-related cost of care for certain conditions—not the overall cost of care (i.e. the costs of ED readmissions, chronic disease management, or care coordination). If cost of care is studied in this restricted, particular manner, introducing adjustments for social risk factors will not affect the reimbursements healthcare systems receive. However, the large body of evidence presented above demonstrates that given the higher total cost of care, failing to account for social risk would take away money from health care systems that serve populations with higher rates of social risk. This in turn limits their ability to provide high-quality health care.

This Health Policy Journal Club review is a collaboration between Policy Prescriptions® and the Emergency Medicine Residents’ Association. This review was written by Vivek Shah. He is a member of the EMRA Health Policy Committee and a fourth year medical student at the David Geffen School of Medicine at the University of California Los Angeles.

Abstract

Medicare’s Merit-based Incentive Payment System (MIPS) includes episode-based cost measures that evaluate Medicare expenditures for specific conditions and procedures. These measures compare clinicians’ cost performance and, along with other MIPS category scores, determine Medicare Part B clinician payment adjustments. The measures do not include risk adjustment for social risk factors. We found that adjusting for individual and community social risk did not have a meaningful impact on clinicians’ cost measure performance. Across eight cost measures, 1.4 percent of clinician groups, on average, had an absolute change in their cost measure performance percentile of 10 percent or more (range, 0.4-3.4 percent). Prior analyses have generally found higher health care costs for patients with increased social risk. MIPS episode-based cost measures are distinct from previous cost measures because they only include costs related to the specific condition being evaluated. This unique approach may explain why costs were similar for patients with high and low social risk before any risk adjustment. MIPS episode-based cost measures do not appear to penalize clinicians who primarily care for patients with increased social risk.

PMID: 32897780

Sandhu, A, et al. Health Affairs. 2020; 39(9): 1495-150.