This presentation was current at the time it was published or uploaded onto the web. Medicare and commercial payers change their policies frequently.

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1 Cost, The Forgotten Component of the Medicare Merit-based Incentive Payment System (MIPS) for National Society of Certified Healthcare Business Consultants Presented By Maxine Lewis, CMM, CPC, CPC-I, CCS-P, CPMA Maple Knoll Terrace Cincinnati, Ohio AAPC MACRA Proficient 1

2 Understand what is the Cost Component of MIPS Learn how the Cost Component will affect reimbursement for Medicare Know what the practice has to do to better understand the requirements for Cost This presentation was current at the time it was published or uploaded onto the web. Medicare and commercial payers change their policies frequently. 2

3 NEW MANDATES MACRA amends 1848(a)(8)(A) of the Social Security Act affecting the quality reporting programs Policy changes- repeal SGR and override the 21.2% cut in Medicare physician payments. Providers have a choice to participate in MIPS (Merit Based Incentive Payment System) or APMs (Alternative Payment Systems) 3

4 The Medicare Access and CHIP Reauthorization Act aims to improve outcomes, minimize the burden of participation and provide fairness and transparency in operation. This program affects more than 600,00 clinicians. An estimated 80% of overall healthcare costs are attributed to decisions made by clinicians and they are aware of how decisions influence overall healthcare costs. 4

5 MACRA consolidates and expands payment for fee-for-performance creating MIPS which is a consolidation of three existing incentive programs, Quality- PQRS ends in 2018, certain aspects of the program may be incorporated under the new incentive program Advancing Care Information- EHR Meaningful Use; Cost -Value-based payment modifier adjustments will be combined under MIPS. Clinical Improvement Activities -will be added to MIPS 5

6 Part B providers will transition over the next several years into either MIPS or an Alternative Payment Model (APM) program Beginning January 1, 2019 Medicare Part B payments will be directly affected by the rules and regulations of MIPS. 6

7 Clinicians who enroll in Medicare for the first time in 2017 Clinicians who participate in an Advanced APM and are either a Qualifying APM Participant (QP) or Partial QP Clinicians who bill Medicare for $30,000 or less Clinicians who have provided care for 100 Medicare patients or fewer Clinicians who are not in a MIPS-eligible specialty 7

8 Each of the components of MIPS has a Composite Score based on the calendar year. For example: Quality counts for 60% Advancing Care information 25% Improvement Activities 15% Cost 0% 8

9 There will be significant changes to the way Medicare/Medicaid pays physicians by accelerating changes to these Value Based payments % each year* % each year* * (subject to MIPS & APM adjustment) 9

10 *2019 +/- 4% or no adjustment base on reporting results of 2017 *2020.+/- 5% or no adjustment base on reporting results in 2018 * /- 7 % or no adjustment base on reporting results in 2019 * /- 9% or no adjustment based on reporting results of those who will not report under MIPS performance *Individual eligible clinicians within a practice or a practice reporting as a group *Non-advanced APMs * Most will not qualify for 2017 * % lump sum bonus based on performance year-the assessments will be applied at an NPI/TIN combination 10

11 MIPS adjustment factor is for each MIPS EP/year in the form of a percentage Determined by comparing the composite performance score to the performance threshold Aggregate Application of MIPS Adjustment for additional performance threshold for exceptional performance Scaling Factor will apply to ensure budget neutrality requirement is met In addition to the MIPS Adjustment Factor, EPs can earn an additional positive percent (EPs composite performance score has to be to the performance threshold) 11

12 Four performance categories for deriving a provider s potential annual score- 25% or up to 100 points for Advancing Care Information 15% or up to 40 points for Improvement Activities 60% or up to 60 points for Quality Performance and 0% or 0 points for cost. 12

13 A cost measure represents the Medicare payments for the items and services to a beneficiary during an episode of care. The episode of care is the basis for identifying items and services through claims that are furnished to address a condition within a specified time frame. Building cost measures involves several essential components. 13

14 CMS will calculate cost measures of a clinician s performance using claims data. Beginning in 2018, clinicians will be assessed on their performance in: Medicare spending per beneficiary (MSPB) Total per capita costs Condition and treatment episode-based measures The cost category will be weighted at 10% of a clinician s final score under MIPS for the 2018 performance period, and 30% for the 2019 performance period and beyond. 14

15 The MSPB and total per capita cost measures were included in the Value-Modifier calculation. In addition, physicians have been provided with feedback on the episode-based measures through the supplemental Quality and Resource Use Report (QRUR). 15

16 Cost measures represent Medicare payment for services and items furnished during a beneficiary during an episode of care. 1. Define an episode of care 2. Assign costs to the episode group 3. Attribute episode to one or more clinicians 4. Risk adjusting episode group resources to compare like beneficiaries 5. To the extent possible align episode of groups with indicators of quality, such as outcomes. 16

17 Per capita cost measures are risk adjusted to account for differences in patient medical costs and to more accurately allow providers and groups to compare themselves to their peers. The CMS HCC risk adjustment model is used to first beneficiary level risk scores which are then used to determine the risk adjustment factors applied to each TIN through the GRUR risk adjustment model. This process is used to ultimately determine the expected costs of care compared to the non-risk-adjusted per capita costs and across all groups as compared the the mean beneficiary cost. 17

18 Cost measures are risk adjusted to account for differences in patient characteristics such as multiple chronic conditions which may affect a clinician s performance on the measure A payment-standardized, annualized risk-adjusted, and specialty-adjusted measure that evaluates the overall efficiency of care provided to beneficiaries attributed to solo practitioners and groups using ALL Medicare Part A and Part B claims. This includes visits to other providers, visits to hospitals, and inpatient stays. 18

19 Calculated similarly to total per capita cost per beneficiary, but concentrates on COPD, CAD, diabetes, and heart failure. This will be included as a part of the cost category in 2018 but will be expanded to include more disease types and episodes of care. Medicare Spending per Beneficiary (MSPB) Part A MSPB assesses the cost to Medicare of services performed by TINs during an MSPB episode. This comprises the period immediately prior to, during, and following a patient s hospital stay (3 days prior to and 30 days post admission). This only includes inpatient stays. This will be included as a part of the cost category in

20 Section 1343 of the Affordable Care Act provides a permanent risk adjustment for all new plans in the individual and small group market inside and outside the Marketplace. Most risk adjustment models used for payment are prospective, meaning that they use prior years information to predict current year medical expenditures. 20

21 Risk adjustment is a process of collecting all diagnosis codes from patient charts and using these illnesses (along with) their comorbidities and complications to determine the ICD-10 codes which drive risk. There are more than 9000 ICD-10 codes out of 68,000 that map to 79 Hierarchy Condition Categories (HCC) codes in the Risk adjustment model 21

22 A diagnosis is a key clinical factor that drives the medical treatment decisions and costs and is widely used in risk adjustment models Because of the large number of ICD-10-CM codes, must be grouped into smaller number of organized categories that produce a profile of each person to provide a clinically meaningful and statistically stable system. CMS-HCC diagnostic system begins by classifying all diagnoses codes into Diagnostic Groups (DXG) which represents a well specified medical condition or set of conditions. 22

23 All ICD-10-CM codes map to exactly one DXG DXGs are further aggregated into Condition Categories. Condition categories describe a broader set of but related diseases. Example of a CC: Diabetes with acute complications includes Type II diabetes with ketoacidosis or coma and Type I diabetes & secondary diabetes (each with ketoacidosis or coma) 23

24 CMS used the Hierarchal Condition Categories (CMS-HCC) as the starting point for the HHS risk adjustment diagnostic clinical classifications, a payment model begun in Most recently (2003) Medicare Advantage plans rely on the HCC system for reimbursement linked to their members in the plan. They are indicators of each members health status. 24

25 Diagnostic categories should be clinically meaningful Each diagnosis category is a set of ICD-10 codes These codes should all relate to a reasonably well-specified disease or medical condition that defines the category. Conditions must be significantly clinical specific. 25

26 Diabetes Type I, Type II or secondary diabetes and its manifestations: HCC17 Diabetes with Acute Complications HCC18 Diabetes with Chronic Complications HCC19 Diabetes without Complications 26

27 Chest pain Coronary Artery Disease Gastrointestinal Hemorrhage Kidney and Urinary Tract Infections Seizures Migraine Poisoning and Toxic Effects of Drugs Criteria episode is share of Medicare expenditures, clinical coverage, opportunity for improvement in acute, chronic and procedural care settings 27

28 Diabetes is associated with a risk of complications that may affect one or more of an individual s organ systems. Documentation and the ICD 10 code submitted by a provider for patient services should reflect the relationship between the condition and severity of disease. The following list related to diabetes provides details used to determine correct coding. Is the diabetes: Type I or Type II Secondary to another condition With or without complications With ketoacidosis With hyperosmolarity With coma With renal manifestations With ophthalmic manifestations With neurological manifestations With peripheral circulatory disorders With other specified manifestations (ulcer & location, chronic ulcer) With unspecified complication Important coding note: When a patient has diabetes and a manifestation of it, both conditions should be coded for the patient (i.e. neuropathy due to diabetes, chronic kidney disease secondary to diabetes). 28

29 Diagnostic categories should predict medical expenditures (including drugs) Diagnoses in the same HCC should be reasonably homogeneous with respect to their effect on both current (this year s) cost (concurrent risk adjustment) or future (next year s) cost (prospective risk adjustment) 29

30 Diagnostic categories that will affect payments should have adequate sample sizes to permit accurate and stable estimates of expenditures. The data cannot reliably determine the expected cost of extremely rare diagnostic categories. 30

31 Document and code for any patient condition that is: Present but stable Managed on therapy Requires observation Requires referral to another provider for management Influences your decision making in care of the patient Avoiding documenting history of when the condition currently exists. Cannot be extrapolated from P.F.SH. 31

32 Conditions that are present and unresolved or unlikely to resolve need to be documented at least annually. CMS considers the condition resolved if not evaluated and coded at least once/calendar year, in which case the risk factor score for the member is lowered. Forever codes conditions that do not go away and patients are expected to have forever. Amputation Transplants Alcoholism in remission CHF (compensated) Might be forever codes Ostomy Cirrhosis Diabetes Hepatitis Paraplegia/Quadriplegia be specific 32

33 Chronic conditions are conditions that the patient has and is expected to have an ongoing health issues: Document chronic conditions annually even when stable with treatment Document that the condition is chronic Document severity/stage of condition (stage IV chronic kidney disease) Document associated conditions or complications and relationship to the underlying chronic condition (diabetic retinopathy) 33

34 Many chronic conditions are especially relevant to HCC coding- alcohol dependence in remission, certain amputations, and artificial openings for example, because they serve as excellent predictors for future healthcare needs. These conditions require additional specificity in ICD-10-CM. Documentation in face to face encounters with the healthcare provider and patients must be monitored, evaluated, assessed and/or treated, MEAT Provider documentation is required to support diagnoses that map to Hierarchical Condition Category (HCC) codes. 34

35 History of Cancer appropriate diagnosis when the patient has successfully completed treatment for malignancy, does not have active disease or metastases and is not being treated for cancer Cancer on a long term therapy (i.e. breast/prostate cancer on hormonal therapy) is active cancer, not history of cancer when the therapy is not prophylactic. A patient with cancer who declines treatment is considered active cancer. History of stroke vs CVA A stroke is an acute event and should not be diagnosed once a patient is discharged from the hospital. Document deficits and diagnose history of stroke or the specific deficits (i.e. hemiplegia secondary to CVA) 35

36 Diabetic manifestations nephropathy, neuropathy, etc. Document the causal relationship between the conditions using secondary to or due to statements and diagnose both conditions (i.e. neuropathy due to diabetes). Hypertensive renal disease document & code both the hypertension & the renal disease Infections document & code for both the type of infection & the organism Example: UTI & E. Coli 36

37 The diagnostic classification should encourage specific coding: Vague diagnostic codes grouped should be worth less severe and will be lower paying diagnostic categories therefore providing incentives for more specific diagnostic coding. Because each diagnostic code potentially contains relevant clinical information, the classification should categorize all ICD-10- CM codes 37

38 The classification system should be internally consistent. If a diagnostic category A is higher-ranked that category B in a disease hierarchy, and category B is higher-ranked than category C, then category A should be higher ranked than category C. 38

39 CMS is developing to identify resources associated with specific care- episodes and this allows professionals to report their specific role in treating the patient (eg., primary care or specialist) and the type of treatment they deliver (eg., acute episode, chronic condition). This process addresses concerns and algorithms and patient attribution formulas with additional research and recommendations on how to improve risk adjustment methodologies to ensure that professionals are not penalized for serving sicker and more costly patients. 10% of total adjustment (2019) growing to 30% of total adjustment

40 In addition, Costs are based on episodes of care and are risk adjusted for factors such as age and severity of illness and the included payments are standardized to account for geographic variation. 40

41 Patient attribution is based on the majority of primary care services a physician or NPP provides to a beneficiary. CMS will use a minimum case size of 20 for a quality or cost measure to be included in the quality of care or cost composite. If a group of providers fails to meet the minimum number of cases for a particular measure, the measure would not be counted and the remaining measures in the domain will be given equal weight. 41

42 CMS is also using a specialty benchmarking in an attempt to more accurately account for group practice s specialty composition so that qualitytiering produces a fair peer group score. To more accurately account for a group practice s specialty composition so that quality-tiering produces fair peer group comparisons, CMS makes changes to the calculation of the standardized score for each cost measure by applying a specialty adjustment to account for the specialty composition of the group prior to computing the standardized score for each cost measure. 42

43 CMS adjusts the standardized score methodology using three steps: 1) Create a specialty-specific expected cost based on the national average for each cost measure, by attributing beneficiaries to a group using the plurality of primary care services methodology. For each specialty, calculate the average cost of beneficiaries attributed to groups of physicians with that specialty, weighted by the number of EPs in each group. 2) Calculate the specialty-adjusted expected cost for each group of physicians by weighting the national specialty-specific expected costs by the group s specialty composition of Part B payments. The Part B payments for each specialty are determined based on the payments to each EP in the group, and each EP is identified with one specialty based on its claims. 3) Divide the total per capita cost by the specialty-adjusted expected cost, and multiply this ratio by the national average per capita cost to convert this ratio to a dollar amount that can then be used in the standardized score to determine whether a group can be classified as high, low or average cost. CMS will identify the specialty for each EP based on the specialty that is listed on the largest share of the EP s Medicare Part B claims, using the EP s specialty listed in PECOS. 43

44 Every note should include the following: Date of service Patient name & date of birth on every page Provider signature and credentials Only industry standard abbreviations Documentation of each medical condition being Monitored/Managed Evaluated/Assessed/addressed Treatment considered in your care of the patient Be as specific as possible use signs and symptoms if diagnosis is not clear 44

45 Documentation is the only way a diagnosis can be supported for an encounter. Documentation for a valid diagnosis must indicate how the condition is managed, evaluated, assessed, or treated (MEAT) for it to be captured for risk adjustment. The diagnosis must be documented and it should be very clear how the provider is managing the condition. 45

46 This means that providers must accurately capture their patient s health status, while those who fail to capture relevant conditions face lower payments. How does this affect ICD-10-CM? Coders and billers will not be able to assign accurate codes without the presence of legible, accurate, consistent and comprehensive supporting documentation. 46

47 Many providers select their codes from the superbills or electronic dropdown menus which limit the options to nonspecific codes. Many allow the improvement for their documentation with computer assisted documentation, automating the capture of codes and computer-assisted coding and simplifying clarification and allow follow-up with computer assisted documentation improvement. 47

48 Documentation should clearly state the member has diabetes and describe any complications associated with it. Clearly establishing the causal relationship between the conditions is important when it is the provider s impression that diabetes has caused one or more complications. Words that are helpful to create this relationship include due to, because of, secondary to or related to. Providers may also use the word diabetic to show that diabetes is the root cause of the manifestation. Documentation should include the following about the patient: Current diagnosis of diabetes (Secondary, Type I or Type II) Stating history of diabetes or listing diabetes in the Past Medical History does not indicate that it is a current, active problem for the patient Status of diabetes (stable, with or without complication, blood sugars, A1c, concerns, pertinent exam, etc.) The symptoms associated with any manifestations/complication of diabetes Assessment Management/Treatment plan Labs ordered Referrals made and reason for the referral (diabetic education, endocrinology) Medication adjustment or continue medication (coders cannot infer what a medication is for when only listed on a medication list) Continue current regimen 48

49 As such, documentation becomes a major influence on risk adjustment. For years, diagnosis codes have been misused across many levels of care. In fact, one of the largest drivers of diagnosis code selection continues to be which problem matches the CPT codes being billed to demonstrate medical necessity. Coding guidelines state that providers should document all diagnoses that are a part of the medical decision-making process for each visit. For example, if a patient presents with possible strep pharyngitis and also has diabetic neuropathy, it would be inappropriate to choose the former as the primary diagnosis code. However, diabetic neuropathy also should be included because it surely was taken into consideration when treating the first condition. 49

50 The per capita Costs for all attributed Beneficiaries measure is a payment standardized, annualized, risk-adjusted and specialty adjusted measure that evaluates the overall total efficiency of care provided to beneficiaries attributed to solo practitioners and groups as identified by their Taxpayer Identification Number (TIN). CMS uses the per capita costs in combination with the Medicare spending per beneficiary and per capita costs for beneficiaries with specific conditions to determine TIN s relative utilization of healthcare resources information. 50

51 CMS goal for developing cost measures is to provide actionable information that is useful to clinicians and together with the other components of the MIPS program, drive lowered costs and improved patient outcomes. CMS seeks to provide clinicians with information to reduce healthcare spending and promote the delivery of high-value care. 51

52 Questions 52