Pathology/Lab Coding Alert

Pay for performance here to stay.

When the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) became law in 2015, it set in motion a new Merit Based Incentive Program System (MIPS) to re-shape the old fee-for-service Medicare payment model and consolidate existing quality programs for the future. Check out these MIPS tips to help you prepare for 2016 and beyond.

Learn the Quality/Payment Plan

MIPS is a payment mechanism that will provide annual updates to physicians starting in 2019 based on performance metrics. The metrics include quality, resource use, clinical practice improvement activities, and meaningful use of an electronic health record (EHR) system.

Unlike the flawed Sustainable Growth Rate (SGR), the new system will adjust payments based on individual performance. Importantly, MIPS does not set an arbitrary aggregate spending target, which previously led to the need for annual patches to prevent SGR-mandated cuts.

Tip: CMS has published a draft Quality Measure Development Plan (MDP), which creates a framework for the development of quality measures under MIPS and Alternative Payment Models (APMs). Although the final plan is not yet available, the draft provides a peek at how CMS might consolidate prior quality programs moving forward, notes Todd Rodriguez, partner and co-chair of Fox Rothschild LLP’s Health Law Practice. 

Quality reporting: The three existing quality programs will be consolidated under MIPS beginning in 2019 — Physician Quality Reporting System (PQRS), Value-Based Payment Modifier (VBM), and Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals (EPs), also known as Meaningful Use. “The quality measures that these three programs utilize initially form the foundation for the MDP,” said partner attorney Laurie Cohen in an analysis for Nixon Peabody LLP.

No way out: Maybe you thought you could escape MIPS burdens since MACRA would allow physicians to move into APMs such as accountable care organizations. But “MACRA requires the quality measures used in APMs to be comparable to the quality measures used in MIPS,” said Don McCanne, MD, in a blog posting for the Physicians for a National Health Program. “MIPS is now an obligation no matter where you turn.”

Keep Current with PQRS

Although MIPS is coming, the PQRS program continues for now. Groups not reporting PQRS measures in 2016 will receive a two percent penalty assessed against their 2018 Medicare allowable payments.

Pathologists now have eight quality measures they can report. Physicians and certain other healthcare providers qualify for PQRS, but many professionals associated with labs, such as clinical laboratory scientists and pathology assistants, do not qualify. Also, pathologists whose place of service is independent lab (POS 81) can’t participate, because CMS classifies an independent lab as a medical supplier, not a physician.

Resource: See Appendix 2 for a list of PQRS pathology measures and the associated CPT^® Category II and HCPCS Level II codes.

Take a Closer Look at the 2016 VBM

The Affordable Care Act requires CMS to apply a VBM to physician payments for all providers by 2017. CMS has been gradually phasing in the VBM program, which aims to incentivize physicians to provide high quality and cost effective care. Because it is a budget neutral program, there will be penalties for low performers to offset the bonuses for high performers.

Take note: The VBM applies at the tax identification number (TIN) level and fifty percent of all eligible providers under the TIN must satisfy PQRS reporting requirements. This includes all physicians and advanced practice providers, full time and part timers.

The VBM methodology looks at both cost and quality scoring for individual providers and groups as compared to their peers. Groups satisfying PQRS reporting go on to the quality-tiering step, and will be graded as below average, average, or above average and have the potential to earn a small bonus. You can find out how you’re scored through the Quality Resource and Use Reports (QRURs), also known as Physician Feedback Reports. 

Double whammy: As previously mentioned, the PQRS penalty for non-participation this year is negative two percent. But on top of that, the VBM penalty for not participating in PQRS is either negative two or negative four percent, depending on your group size. That means your total penalty for non-participation could be as high as negative six percent. And if you count the meaningful use EHR incentive program, some practitioners could see payment penalties as high as 11 percent.

Look ahead: As MIPS takes over in 2019, expect VBM to phase out after 2018.

Not sure where to start? Get on board with PQRS if you haven’t already. That is half your battle. Just rote participation will save you two penalties in 2018.

Next, get a hold of your QRURs, see where you fall among your peers, and begin making internal improvements in your weak areas. Physicians should be sure to review their QRURs so that they can understand how the scoring works and be able to plan ahead.