The CMS Merit-Based Incentive Payment System (MIPS) rules have changed for 2018, and the financial impact for physician practices has edged higher.  Based on performance in 2018, physician reimbursement for Medicare Part B in calendar year 2020 will be reduced by as much as 5%.

The financial upside for physicians is more difficult to identify.   MIPS includes two bonus calculations:

  • The first is +5% times a “scaling factor” so that the total bonuses will equal the total penalties. Based on CMS estimates of the scaling factor, the maximum incentive is estimated at 0.30%.
  • The second bonus is for “exceptional performers”. Physicians who score between 70 and 100 will qualify for this second bonus.  Exceptional performers will share a $500 million bonus pool.  CMS estimates that physicians who score a perfect 100 will get an exceptional performer bonus of approximately 1.75%.

For a physician who scores a perfect 100, the estimated bonus is 2.05%.  We must stress that while the downside is clearly established, the upside amounts are estimates and the actual adjustments will be determined by CMS in mid-2019, according to the program rules, after all provider data and attestations are submitted.

To summarize, the downside is easy to calculate.  Physicians who fail to participate or score poorly will be penalized in 2020 at the rate of 5% of Medicare Part B reimbursements.   Physicians who excel with a perfect score, based on Eagle Consulting’s estimates, will earn a bonus in an estimated range of 2.05%.  To put this in dollar terms, a group practice with $1 million in Medicare Part B will experience a swing from -$50,000 to +20,500.

Eagle Consulting generally advises physician practices to consider one of two strategies.  The first strategy is to invest a very modest amount of resources to avoid the penalty.  The second strategy is to invest a higher level of resources to maximize the potential bonus.  Eagle Consulting Partners provides assistance to physicians to both select an appropriate strategy and to work through the operational details to implement it.

Editor’s Note:  Updated 2/16/2018 based on CMS documentation

About Gary Pritts

President, Gary Pritts

Gary consults in the areas of physician practice management, medical information systems, HIPAA compliance, health and productivity management and general business management.  Gary serves on the board of Lakewood Hospital, one of the Cleveland Clinic Regional Hospitals, and is a founder and past president of eHealth Ohio, and is active with numerous professional organizations.  He served as product development manager for the EDI clearinghouse division of Quadax, a regional clearinghouse, and  understands provider organizations from his 6 years as President and owner of Premier Rehab, a Medicare Certified Rehab agency with two Cleveland locations.  His computer background includes 15 years in various computer and computer service organizations.  He has a B.S. in Computer Science from Purdue University and an M.B.A. from Harvard Business School.

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