Nearly every ask of Congress comes with a price tag, especially when it comes to reforming Medicare. For example, the Medicare conversion factor -- the rate used to pay providers caring for Medicare patients -- is lower in 2023 than it was a quarter century ago and is due for yet another reduction in 2024. As I wrote previously, correcting this problem is necessary but won't be cheap. On a positive note, there is another action that Congress should also take to protect Medicare and it doesn't come with a price tag.
In 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) passed with bipartisan support. Among the issues that the legislation addressed, MACRA ended the Sustainable Growth Rate (SGR) program. The SGR had led to the annual "doc fix": Congress would have to intervene each year to avoid a precipitous decline in provider reimbursement. MACRA replaced the SGR with the Quality Payment Program (QPP). The QPP is a value-based payment system designed to incentivize high-value care. The program has two pathways: alternative payment models (APMs) for providers who meet certain criteria, such as being part of an accountable care organization, and the merit-based incentive payment system (MIPS). A recent article noted the difficulties that medical specialists face participating in APMs. Instead, many are participating in MIPS. But the pathway is inherently flawed.
MIPS is the value-based payment system for the fee-for-service Medicare payment program. For context, the government was concerned that a fee-for-service system rewards providers solely for the volume of care delivered, even if it's low value care. So, the MIPS program was designed to promote high value care. Here is how MIPS works: Medicare providers are still paid on a fee-for-service basis, but the amount of the payment depends on the provider's cumulative score on a series of performance measures. MIPS scores providers on a scale of 0-100. Annually, a "performance threshold" number is set, such that those who score above the threshold get a positive adjustment to their fee-for-service payment and those that score below get a penalty. For budget neutrality purposes, the penalties fund the pool of positive adjustments. Said more clearly, the losers pay the winners.
While well intentioned, the MIPS program has unfortunately failed. It is burdensome to medical practices, adds significant cost to the healthcare system without discernable patient benefit, and is uneven across the specialties. In June 2023, the House Energy and Commerce's Oversight and Investigations subcommittee held a hearing on MACRA. Subcommittee Chair Morgan Griffith (R-Va.) noted the program is complex and expensive. Subcommittee Ranking Member Kathy Castor (D-Fla.) shared similar concerns. Expert testimony elaborated on this, noting that MIPS is burdensome and costly to providers, while ineffective in advancing the value of care delivered to Medicare beneficiaries.
In 2021, a Government Accountability Office report raised concerns about costs to providers to comply with the program. A study showed that the annual mean cost to practices of participating in MIPS was almost $13,000 per physician and the time required was about 200 hours annually per physician. At the subcommittee hearing, before calling for the elimination of the MIPS program, J. Michael McWilliams, MD, PhD, a professor of healthcare policy at Harvard Medical School stated, "I do not recall a more uniformly and resoundingly critiqued payment policy in my career."
The comments on MIPS made at the hearing were not new. In a 2018 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) noted profound and fundamental flaws in the program's design and called for its elimination. For example, since payments depend on performance, MIPS encourages reporting on measures providers already perform well on, as opposed to areas where there is an opportunity to improve. A 2022 study found a disconnect between MIPS scores and quality of care measures.
The performance threshold is also flawed. The score separating "winners" and "losers" is updated annually and is based on the mean or median of past scores. For 2024, CMS proposes to set the threshold at 82 points, so any score below that is penalized. However, this approach falsely assumes equivalency between past and present. Given profound changes in MIPS over the years, benchmarking off past performance is at best unreliable and at worst counterproductive since it distracts practices from actual quality improvement. One example of the differences between past and present: extra or "bonus" points were previously more available, helping practices achieve high scores. Their removal makes it harder to achieve the same score.
As evidence of the program's failure, it is now possible for a practice to score perfectly on the relevant performance measures that are made freely available, and still be punished for "under-performing." This results from a lack of relevant measures and point caps on those measures. Imagine taking a test with 6 questions, each worth 10 points, getting all correct, and being told you failed because you only scored a 60. That is essentially what many practices are facing with MIPS. A system that penalizes a group for underperforming despite perfect performance is unquestionably flawed. The result of a system this dysfunctional is that providers focus on gamesmanship to avoid penalties, not actual quality improvement. MedPAC noted this concern, going so far as to suggest that MIPS may even be slowing the progression to high value care.
In the 5 years since MedPAC called for the end of MIPS, the program's failures have worsened. At the recent Energy and Commerce subcommittee hearing, there were renewed calls for MIPS to be eliminated. Unlike other problems with the Medicare reimbursement system, this one can be fixed without having to ask, "how much will it cost." Eliminating the MIPS program, or at least hitting pause while an alternative approach is developed, would not only reduce the burden on providers and stop the costly gamesmanship of managing a broken system, but it would also clear the way for meaningful reform. Let's hope Congress takes the easy win.
Richard Heller, MD, MBA, is associate chief medical officer for Health Policy & Communications at Radiology Partners.