Building a Better Clinician Value-Based Payment Program in Medicare

“The QPP [Medicare Quality Payment Program] has 2 tracks: (1) the Merit-Based Incentive Payment System (MIPS), which is the default track, and (2) the advanced alternative payment models track, which includes novel payment models like accountable care organizations (ACOs). Both tracks reward or penalize clinicians based on their performance on cost and quality measures. The initial results on the MIPS, which accounted for 95.7% of participating clinicians in the first year (2019), were disappointing from a social equity and quality improvement perspective. Studies that examined publicly reported data from Centers for Medicare & Medicaid Services (CMS) showed that clinicians who performed best served fewer socially and medically complex patients and belonged to large organizations with the resources to self-select favorable performance measures. In response to these and other problems, many groups have called for discontinuing the MIPS and similar programs.

[..] at least 4 problems evident in the MIPS and other VBP [value-based payment] programs must be addressed.

  1. [..] based on the fee-for-service model, with relatively small payment penalties and bonuses layered on traditional volume-based payment. If fee-for-service is an inherently misguided approach, a system that preserves its underlying incentives will not fix it.
  2. [..] often designed to improve value for CMS rather than patients. Value does not solely imply cost reduction. Rather, CMS should incentivize practices to deliver high-quality, patient-centered, guideline-based care. Many claims-based measures, such as preventable hospitalizations or readmissions, create little opportunity for real-time quality improvement because these measures have a 1- to 2-year lag. Further, outcomes that patients value, such as quality of life and functional status, are not typically measured; the lack of patient-reported outcomes in many VBP programs limits their ability to meet patients’ core needs.
  3. [..] administrative complexity. In the MIPS, clinicians self-select performance measures on which they will be evaluated from nearly 400 measures. Many measures require manual reporting via an electronic portal or registry. This creates an additional time and resource burden for clinicians that competes with time and resources spent keeping patients healthy. This complexity also creates a competitive advantage for clinicians affiliated with large organizations that can optimize administrative reporting strategies that may not reflect actual improved care.
  4. [..] inadequate risk adjustment that fails to account for important patient factors, such as functional impairment and poverty, which influence cost and clinical outcomes. The result is that clinicians who serve the most medically and socially vulnerable patients are penalized by a flawed measurement system. This also creates incentives to avoid patients who most need treatment.

[..] Making meaningful improvements to clinician payment in Medicare requires a different approach than the MIPS, which attempts payment reform by merely adding a layer of administrative complexity on top of existing fee-for-service structures.

  1. [..] successful programs are population-based models that assign beneficiaries, often prospectively, to clinician groups and give those groups global spending targets and risk-sharing in savings and losses. These payment systems incentivize management of the patient’s entire health care experience and needs across primary care and specialist clinicians, as well as outpatient and inpatient care settings, and should be viewed as movement on a continuum away from fee-for-service and toward global payment.
  2. [..] these programs hold clinicians accountable for performance on essential measures of patient care quality and clinical outcomes. Importantly, these measures are mandatory, making it more difficult for clinicians to engage in reporting strategies that focus on optimizing apparent performance over actual improvements in patient quality of care. They are also an order of magnitude fewer in number than the MIPS, reducing administrative complexity, and they include both key process measures as well as outcome measures that are important to patients. In addition, these measurement systems include continuous, timely feedback to clinicians on performance throughout the year.
  3. [..] the most successful participating organizations are led by clinicians, not hospitals.
  4. [..] programs work for vulnerable patients and clinicians in safety-net practices in 2 ways. Because many such models judge participants against their own historical performance rather than external benchmarks, issues of inadequate risk adjustment become less problematic; every participant succeeds by improving, no matter where they start. Also, these models provide assistance to low-resourced practices in poor and underserved areas, as in the ACO Investment Model, to develop the infrastructure needed to succeed.

[..] Medicare’s volume-based, fee-for-service model of paying for clinician, outpatient, and other services is broken, but early efforts at outpatient VBP, especially the MIPS, have not met their goals. A wholesale replacement of the underlying traditional payment model is needed to ensure that these programs improve quality, patient-centered outcomes, and efficiency while not disadvantaging safety-net clinicians.”
Full editorial, Johnston KJ, Hockenberry JM and Maddox KEJ. JAMA 2020.12.18