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MedPAC Wants to Redesign MIPS, Unify Post-Acute Payments

News  |  By Philip Betbeze  
   June 15, 2017

An alternative construct for the Merit-Based Incentive Payment System would withhold a portion of payments for clinicians that they would get back based on their performance on quality metrics.

The Medicare Payment Advisory Commission unveiled its June report on Medicare and the healthcare delivery system today and its recommendations, should they be enacted, would represent a big shift in how Medicare’s Merit-based Incentive Payment System (MIPS) and its advanced alternative payment models (A-APMs) would be administered by changing incentives in both programs. The group also recommended big changes in payments for post-acute care.


The programs were created in the 2015 “doc-fix” law, otherwise known as the Medicare Access and CHIP Reauthorization Act of 2015, which repealed the sustainable growth rate methodology for updates to the physician fee schedule. That methodology was replaced with MIPS, which consolidated three incentives that focused on quality reporting, value-based payments and the electronic health record incentive program. Clinicians could avoid MIPS to some degree by participating in A-APMs.

MedPAC contends in its report that MIPS, as it is presently designed, won’t help beneficiaries choose physicians, help clinicians change practice patterns to improve value, or help the Medicare program reward clinicians based on value, as it was intended to do.

Its recommended fixes to change that calculus would involve Medicare’s withholding of an unspecified portion of payments from clinicians under MIPS, who would be able to recoup that withhold based on their performance on quality measures. The independent, nonpartisan federal agency recommends that in such a redesign, CMS should eliminate the current set of MIPS measures and rely on a much smaller set of population-based outcome measures. The proposed outcome measures could be calculated from claims or surveys and, says MedPAC, would thus minimize burdensome clinician reporting. Clinicians could get the quality withhold back by joining a virtual group or an A-APM.

MedPAC would also change how MACRA qualifies clinicians to receive a 5% incentive payment for participating in A-APMs by eliminating the threshold of clinicians’ revenue that must be reached to qualify. Instead the incentive would be proportional to clinicians’ A-APM involvement, which in theory should encourage smaller practices to participate in A-APMs. MedPAC also proposed moving the $500 million per year fund (from 2019-2024) intended to reward clinicians with “excellent performance” on their MIPS scores to the A-APM program, which would make MIPS less attractive to clinicians.

Post-Acute Prospective Payments

MedPAC also recommended creating a unified prospective payment system for post-acute care. MedPAC’s idea would attempt to eliminate the incentive the current fee-for service program encourages for skilled nursing facilities, home health agencies, inpatient rehab facilities and long-term care hospitals to select certain patients over others.

A unified post-acute prospective payment system would decrease payments for rehab care unrelated to patient characteristics and would increase payments for medically complex care. MedPAC says Medicare payments currently exceed providers’ costs by 14% across all care setting and recommends aggregate payments be lowered by 5% to more closely align with costs. It recommends the new PAC PPS should begin in 2021, with a three-year transition.

MedPAC also recommended reforming Medicare payment for drugs under Part B, and an examination of the design issues surrounding the idea of premium support in Medicare.


Philip Betbeze is the senior leadership editor at HealthLeaders.

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