Strategic Considerations for Medical Oncology Practices
Implications of a Zero Sum Game
A Doomsday Solution to a Zero Sum Game
Strategic Situational Analysis
MACRA/MIPS (MIPS) will become the operational standard in 2018 by which CMS evaluates: 1) The quality of care delivery, 2) Cost of care delivery, and 3) future rate increases/decreases for individual physicians and practices. With very few exceptions (participation in an Advanced APM), MIPS will be applied to all physicians in the US providing care to Medicare beneficiaries, and will eliminate the former programs of Meaningful Use, PQRS and Value Based Purchasing. Going forward, MIPS will be the single interface through which CMS regulates reimbursement. Having an effective strategy which reflects this reality will be paramount for any financial or operational success in clinical care delivery. In this blog we look at MIPS relative to medical oncology practice.
The best framework to understand the strategic implications of MIPS is Game Theory. In this framework, MIPS is a continuous, cooperative, zero-sum game. Like chess, MIPS is a zero-sum game – for every winner there is a corresponding loser. Game theory assumes rational players driven towards maximizing a common goal – in the case of MIPS the goals are money (through reimbursement rates) and quality medical care. MIPS accomplishes this by providing financial incentives to high scoring physicians, with money taken from poor performers, determined based on objective metrics of quality care delivery. The net financial impact on the system is zero. The game is designed to improve care over time by rewarding quality, with funds taken from those who don’t meet the same standards.
MIPS is a continuous game. There will be an annual squaring up of accounts, and then the game will reset and begin anew the next year, repeating into the future. As with any CMS program, the rules will be adjusted in the future to influence physician behavior and accomplish the aims of CMS.
MIPS is a cooperative game. The objective is to influence physician behavior to continuously improve performance, not to remove players from the game (unlike tournament style, zero-sum games designed to determine a single champion). The “losers” in the annual MIPS evaluations can either improve their performance in the future, or join those practices more expert in continuous quality improvement. This should produce an annual fundamental reevaluation of a simple question, “Should we continue on our own, or join with another group?”.
There is a third party making the rules in MIPS (CMS), and the parties are encouraged to cooperate to achieve the implicit strategic aims of the rulemaking body; specifically:
- Higher compliance (and presumed quality),
- Reduced number of participants (and therefore system complexity), and
- No increase in cost.
MIPS was designed by CMS based on objective scores in four broad criteria (see below) such that half of the participating physician population will be penalized by reductions in future reimbursement levels, and the proceeds will be distributed to the half of physicians who score in the top half, with disproportionate amounts and performance bonuses paid to top performers.
This is a system specifically designed to be disruptive, and will result in a rapid and complete realignment of the base of physicians in the US, such that low performers seek to affiliate with high performers, reducing the total number of physician practices in the US.
MIPS is a zero-sum game
I anticipate that the pace of this consolidation will roughly correspond to the proportion of physicians left below the mean, or 50% per year. Assuming a total number of affected physician practices in the US of no more than 150,000, the divisor in any year is given by 2n, where n is the number of years of MIPS performance bonuses. For reference, 210 is 1024, and would result in the reduction of total practices by three orders of magnitude over ten years. While this is probably much greater than the actual level of consolidation, it is directionally correct.
According to MIPS, exactly half of these physicians are below average
MIPS has two salient design features which make it an extremely powerful tool for physician practice success or failure:
- Physicians (and other providers) will be benchmarked to all other participating comparable providers according to four criteria:
- Quality, 50% of 2018 score, formerly PQRS;
- Cost, 10% of 2108 score, formerly value based purchasing;
- Advancing care information, 25% of 2018 score, formerly meaningful use; and
- Improvement activities, 15% of 2018 score, new category.
- Based on 2018 performance, CMS will publish standings of physicians and group practices in 2019, and adjust payment up or down by up to 5% in 2020 (plus the ability to gain up to 10% bonus payments for exceptional practices). Bonus amounts increase to 7% for 2019 performance, and 9% for 2020. Including special bonuses for exceptional performance (good or bad), it is contemplated that bonuses reach up to 27% for 2022 payment.
In short, MIPS ensures that high quality, low cost practices are rewarded with extra reimbursement and recognition, while all other practices are penalized in both financial and reputational terms. Success under MIPS is absolutely critical for practices interested in growth and financial success.
How MIPS integrates with former CMS systems
MIPS increasingly Weights Cost in the Future
Increasing Bonus/Penalties in the future
Practical Considerations for Medical Oncology
There is a simple strategic imperative in medical oncology today: deliver value to patients. To make this happen, practices need a laser-like focus on achieving success in value based care programs. To date, this has included the OCM, and various value based care with private payers. Beginning next year and in the future, MIPS will dominate all the others, delivering financial and reputational reward or ruin.
The objective of a reasonable MIPS strategy is to consistently place in the top practices in the US (defined as receiving 70 out of 100 possible points in 2018), thereby receiving the top amount of bonus reimbursement each year, as well as top commendation from CMS.
MIPS approach to practice improvement
There are 4 sections in MIPS that must be dealt with individually. The measurement criteria in each section is based on criteria and measurements developed from the precursor programs (PQRS, Meaningful Use, etc.).
The Cost Section of MIPS requires no action by practices – all reporting is handled directly by CMS using claims data. The application of the cost criteria and how they will be compiled is still somewhat vague. The small weighting (10 points) in the first year will allow CMS to adjust this section in future years based on lessons learned in 2018. Practices can best address this category in 2018 by efficient use of pathways, implementation of the OCM and PCSP, and expansion of clinical trials programs.
The Cost Section is divided into two parts; 1) Medical Spending per Beneficiary (MSPB), (designed to monitor the cost of inpatient episodes), and 2) Total Per Capita Cost (TPCC), (designed to measure total annual cost per patient). How these two measures will be employed in determining costs has yet to be promulgated by CMS, and remains confusing and controversial. Rather than try to modify behavior based on cost criteria in the first year, practices should focus on the OCM, where cost definitions are clear, and the clinical and financial benefits clearly tied together.
The Improvement Activities section of MIPS is new, and is designed to bring Lean/Six Sigma and ISO 9001 quality techniques to clinical practice. Practices can meet all the requirements of this section by achieving PCSP certification, which also ties directly to the requirements of the OCM.
Summary Strategic Considerations
The Advancing Care Information section has 5 required measurements (50% of total score potential), up to 7 additional measurements, with values of 10 or 20 points (totaling up to 90%, and bonus score potential up to 15%, for a total of up to 155% of total value, which is capped at 100%.
Total ACI score is capped at 100%, and weighted at 25% of total MIPS value
The ACI measurements are simply a test of the EHR and its utilization in the practice. The measurements are designed to confirm the robust use of the EHR including messaging and the patient portal. Preparing for and executing the ACI section requires detailed analysis of the capabilities of the EHR and matching them to the reporting requirements.
The MIPS criteria have been integrated with the Oncology Care Model (value based reimbursement) and the Oncology Medical Home, such that many of the measurements used are common to the other programs (see chart below).
Summary and Conclusions
MIPS is a large and complicated regulation, but it can be boiled down to reporting 6 Quality and 15 ACI metrics in 2018 (21 total metrics), provided accreditation by the NCQA for the PCSP medical home. Only the 6 Quality measurements carry substantial risk from benchmarking in 2018. The PCSP requires only 6 key measurements, plus a number of optional metrics. Achievement of a 70 point MIPS score in 2018 will ensure an increase in CMS reimbursement of 5% in 2020, with the potential for bonus reimbursement up to an additional 10%.
Success in MIPS is essential for financial and clinical success. It was intentionally designed as a Zero-Sum game, with losers and winners. The winners will receive increased financial success and recognition for clinical excellence from CMS. There can be no doubt that MIPS will be adopted by private payers, which will harmonize quality and reimbursement standards. This is a game that successful practices will play to win, reaping improved care, financial gain and growth through the consolidation of the less focused practices.