Understanding the CMS MIPS cost measure for Melanoma Resection

The Centers for Medicare & Medicaid Services (CMS) introduced the Melanoma Resection cost measure as part of the Merit-based Incentive Payment System (MIPS). This measure evaluates the cost of care provided during episodes involving the excision of malignant melanoma of the skin or melanoma in situ. 

Who is assessed under this measure? 

This measure applies to healthcare providers billing CMS for excision of: 

• Malignant melanoma of the skin 
• Melanoma in situ

What costs are measured? 

CMS evaluates all costs incurred: 

• 30 days prior to the procedure (e.g., pre-operative tests, consultations) 
• During the procedure (hospital and surgical costs)
• 90 days post-procedure (e.g., follow-up care, complications, or readmissions)

This comprehensive evaluation ensures a full understanding of cost patterns around the patient care episode. 

How are costs calculated? 

Cost assessment involves a comparison between actual costs and expected costs for each care episode: 

• Actual costs: Total costs associated with a specific episode 
• Expected costs: Derived by CMS using statistical models that adjust for patient and procedural complexities

• Head/neck melanoma episodes 
• Trunk/extremity melanoma episodes

All cost measures feature subgroups of episodes that contain different costs. In reviewing 2023 data from 33,000 episodes for the Melanoma Resection measure, we’ve identified that the average cost of head/neck episodes is 43% higher than trunk/extremity episodes. Differentiation ensures better cost comparisons across diverse clinical scenarios. 

The role of risk adjustment 

To ensure fairness, CMS employs risk adjustment to account for factors beyond a clinician’s control. These include: 

• Patient demographics (e.g., age, comorbidities) 
• Clinical complexities (e.g., metastatic cancer, neurological conditions

Types of risk adjustors used by CMS 

• Standard adjustors: Derived from the CMS-Hierarchical Condition Category (HCC V24) model 
• Specific adjustors: Target additional clinical variables, such as graft complications or immunosuppression 

While CMS identifies 124 risk variables in the specification of the model for the measure, statistical analysis of 2023 data suggests only about 30 had significant impact on cost predictions. 

Key variables driving cost variability 

Patient-level variables 

• Metastatic Cancer & Acute Leukemia (HCC8): Reflects advanced cancer complexities. 
• Coma, Brain Compression, Anoxic Damage (HCC80): Associated with severe neurological conditions. 
• Complications of Specified Implant (HCC176): Highlights added costs from surgical complications. 
• Immunosuppression (FLAG_IMMUNOSUPP): Accounts for weakened immune systems. 
• Lymphoma & Other Cancers (HCC10): Additional cancer-related risks. 

Procedure-level variables 

• Place of service 
  • • • • • • • • • Cost varies significantly across Ambulatory Surgical Center (ASC), inpatient, and office settings. 
• Reconstruction techniques:  
  • • • • • • • • Flap Reconstruction (FLAG_FLAP_RECON) 
                • Graft Reconstruction (FLAG_GRAFT_RECON) 
                • Large Reconstruction (>30 cm) (FLAG_LG_RECON) 
• Lymph node involvement  
  • • • • • • • (FLAG_SEN_LN_EXCIS): Sentinel lymph node excision impacts cost. 

Actionable insights for clinicians 

Understanding the variables driving costs can empower clinicians to: 

1. Benchmark performance: Compare actual costs with expected costs across peers. 
   
2. Code patient conditions accurately: Ensure all relevant patient complexities are documented in claims to achieve fair expected cost calculations. 
3. Optimize procedures: Assess whether procedural decisions (e.g., setting, reconstruction techniques) could improve efficiency without compromising care quality. 
4. Address variability: Identify and mitigate cost differences across episodes or providers. 
5. Coordinate care effectively: Streamline patient care to reduce unnecessary expenses and improve outcomes. 

Why does this measure matter? 

The Melanoma Resection cost measure reflects CMS’ commitment to balancing cost and care quality under MIPS. For clinicians, it represents an opportunity to: 

• Enhance operational efficiency 
• Improve patient outcomes
• Optimize performance-based incentives

Empowering providers for the future 

With careful attention to risk adjustment variables, procedural efficiencies, and comprehensive documentation, clinicians can align with CMS evolving value-based care landscape.