Watchdog Highlights Challenges of Medicare Payment Program

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Congressional accountability office reviews first three years of value-based health care program.

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The United States spends nearly twice as much on health care as a share of its economy than the average developed country. Despite this, many of the nation’s health outcomes, including rates of preventable death, chronic disease burden, and life expectancy, lag far behind those of other countries.

To overcome this challenge, policymakers are examining federal health care programs to ensure that they are effective at reducing costs while improving health outcomes.

Recently, the U.S. Government Accountability Office (GAO) published a report reviewing health care professional performance under the Merit-based Incentive Payment Systems (MIPS) program, an initiative created by Congress in 2015 to help spur health care professionals to deliver higher-quality care at lower costs to Medicare patients.

The report highlights multiple challenges faced by the program. But the administrator of MIPS—the Centers for Medicare & Medicaid Services (CMS)—projects that future developments of the program might address these challenges.

The MIPS program is relatively simple in structure. MIPS-eligible health care professionals, of which there were about 950,000 in 2019, are responsible for self-reporting on selected measures within three different categories: quality, improvement activities, and promoting interoperability.

These health care professionals, who may report as a group or as individuals, then receive a final score based upon their relative performance in their chosen measures and the cost-effectiveness of their care delivery.

This final score is compared to a CMS-determined threshold score. To the degree a health care professional’s final score is higher or lower than the threshold score, they will receive a positive or negative adjustment to their future Medicare reimbursements. Because the program is designed to be budget neutral, however, the extra money professionals can receive from a positive adjustment is capped by the savings Medicare generates through negative adjustments.

GAO found that health care professionals’ scores were generally high during the three years it examined, with at least 93 percent of health care professionals qualifying for a positive adjustment in any given year. Although this may seem like an admirable statistic, the budget neutrality of the adjustments makes it problematic for health care professionals.

Because so many health care professionals performed above the threshold, the maximum positive adjustment was 1.88 percent—even where a health care professional qualified for an “exceptional performance bonus.” Health care professionals above the threshold who did not qualify for this bonus never saw an adjustment above 0.20 percent.

Paired with the significant administrative costs associated with reporting MIPS measures, many of the stakeholders interviewed by GAO experienced low returns on investment for their levels of compliance and performance.

Studies have shown that these investments might be particularly burdensome for smaller-scale health care professional groups, as they often lack the same administrative capacities held by larger practices and health systems. Because small-scale groups often receive fewer Medicare reimbursements overall, and therefore stand to gain less money from complying with the program, the reality of high administrative costs may discourage them from self-reporting.

In addressing these concerns, GAO responded that the number of positive adjustments may change in future years as the threshold levels are increased by CMS.

GAO noted skepticism among health care professionals and organizations as to whether the MIPS program meaningfully improves quality of care. The Medicare Payment Advisory Commission, a nonpartisan agency that provides Congress with analysis and advice related to Medicare, previously advised Congress to eliminate the MIPS program entirely.

As the program’s scores are based on reporting selected measures rather than population-level health outcomes, stakeholders suggested that they may be more reflective of compliance with the program rather than of any genuine quality improvements.

Because of this incentive for health care professionals to focus on complying with the self-reporting requirements rather than improving health outcomes, stakeholders also suggested that health care professionals may be encouraged to conduct irrelevant screenings.

A measure of quality under the MIPS program, for example, could assess the percentage of a health care professional’s patients over 18 who were screened for tobacco usage and given treatment when appropriate. But a primary care provider might administer a tobacco usage screening regardless of whether the patient in front of them was there for a standard checkup, a sinus infection, or a broken bone.

In addition, health care organizations and professionals have raised concerns that some of the measures available for self-reporting do not assess common clinical activities for certain medical specialties. One quality measure for emergency physicians sought information about the percentage of adult patients who were prescribed antibiotics for sinus infections—a medical condition that, according to some stakeholders, was not frequently encountered in the emergency room.

CMS officials maintain that future developments of the MIPS program will address these concerns.

In a 2021 proposed rule, CMS pointed to the prospective MIPS Value Pathways (MVPs) program as a way to reduce administrative burdens, allow for more direct comparisons between health care professionals of the same specialty, and promote the reporting of more clinically relevant measures.

CMS plans to begin launching its MVPs program in 2023 while sunsetting the traditional MIPS program at the end of the 2027 data submission period.

According to CMS, the MVPs program will work to align measures across the different reporting categories for particular specialties or conditions. In addition, the program will add patient-centered measures, such as patient-reported outcomes, patient experience, and patient satisfaction. Finally, the program should reduce administrative burdens by including population-health quality measures that CMS can calculate without any health care professional reporting.

By adopting these measures, the MVPs program may be better equipped than MIPs to reduce the health care costs of Medicare patients while improving their health outcomes.