Healthmonix Advisor

MIPS 2021 Incentives and Penalties | We're Entering Prime Time

Posted by Lauren Patrick on January 14, 2021

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For years, we’ve heard that the Merit-based Incentive Payment System (MIPS) will provide a noticeable incentive for participants in this Medicare FFS program. And for years, there have been reasons why that has not occurred. First, CMS wanted to ‘start slow’ with the MIPS program in 2017 and 2018, so the caps on penalties and incentives were small. Then the potential penalties and incentives were raised, but the threshold for qualifying for an incentive remained low. This, coupled with the program’s budget neutrality meant there was not much revenue to distribute to high performers. Then COVID-19 negated much of the program for the last two years. So here we are, in year five, and we see that the program, for the first time, will have a significant downside and upside potential.

This year, 2021, is the first year that many providers will need to pay attention to ensure avoiding a MIPS penalty, and, if desired, work towards a meaningful incentive. And next year, 2022, the bar is further raised. It will no longer be easy to avoid the penalty.

The max penalty for the 2021 reporting year is 9%. This is not going away and is real this year unless unforeseen circumstances arise.  

  1. All providers with a score under 60 points will see a penalty. 
  2. CMS has made achieving a 60 point score more difficult this year.  Bonus points are reduced. There are fewer Quality measures and for the Quality measures that remain, the performance thresholds are higher.  The MIPS Cost component, where providers have less insight and control is increasing in its impact on scores.  The PI component, which started in MIPS as a base score plus performance measures that totaled to a possible score of more than 100%, is now less likely to provide a full 100% score without careful planning.  
  3. More Alternative Payment Model (APM) participants will be eligible for MIPS with the rising thresholds for those programs.
  4. In 2022, the threshold for avoiding a penalty is anticipated to be above 74 points.

All this leads to a more difficult road to avoid a penalty in 2021, and an increase in the actual incentives that providers can attain. In the CY 2021 PFS Final Rule, CMS states that with the finalized “performance threshold at 60 points, the maximum payment adjustment is 7.36 percent”. Based on data in the Final Rule, here are projected estimated penalties / incentives for the 2021 performance year:

MIPS 2021 Payment Adjustments Based on Score

There are a couple items to note about this chart. First, the maximum penalty is applied for any provider with a score of 15 or less. Then it’s a linear scale from 15 to 60. Above 60, the incentive is scaled based on the number of providers received the penalty. Then the incentives rise more rapidly starting at the 85 point level due to the extra ‘exceptional performance’ bonus that CMS provides. 

The actual numbers will vary somewhat from this, based on the final scores calculated for the total set of providers in the MIPS program, but they should be close based on CMS’s analysis. CMS does project that half of providers will achieve a score above 74 points.

So the question is: where will you land in the scale above? And what is the effort / cost to raise your score? It’s worth taking a look early in the year to assess your readiness and projected score and determine a plan. Start by using our MIPS ROI Calculator to determine your potential penalty or maximum bonus incentive. If you are on track, then you can continue. If it appears you will not achieve the score you target, contact us and we’ll help you determine a path forward. 

For details on how these numbers are calculated or how you can achieve a significant MIPS 2021 bonus, please contact us to schedule a discussion.

Topics: MACRA & MIPS, CMS, APMs, Cost Performance Category, 2021 PFS Final Rule