BMN Blog

NOV 27
The Cost Category Returns for 2018

As we finalize 2017 participation in the Merit Based Incentive Program, most of us focused on improved performance in quality since the category carried the highest weight of 60%. Those who had previous success in Meaningful Use found the Advancing Care category easy to address.  The Practice Improvement category is new and somewhat vague, but many practices were already performing tasks that qualified as an improvement activity.  It is important to document the approach to improvement and track success because this category is subject to audit in the future.

The cost category was weighted zero for 2017, but will return for 2018.  This allowed practices to execute transition to the new MIPS format and to focus on new categories. The cost category is weighted at 10% for 2018, and a projected weight of 30% in 2019.  It is important to review the details of how costs are calculated so physicians and coders can focus on improvements.  First, patients are risk adjusted or, a budget is formed for their care by calculating their risk using diagnosis codes provided during the past year.  Each year, the patient’s risk score is reset to best reflect the patient’s current health status.  Coding to the highest specificity is essential to accurate risk adjustment along with coding up to twelve diagnosis to depict the most accurate health status. 

Risk adjustment is not the only aspect considered in calculating costs. Patient attribution is a perplexing facet of the costs calculation.  A patient is attributed to all physicians who treat the patient in a year; if a patient does not have a primary care physician, they could be solely attributed to a specialist due to an emergent episode of care, causing the specialist to bare all the weight of the attributed patient.  Complex patients with multiple comorbidities may be attributed to several physicians, but increased readmissions by one physician could affect all physician’s scores.  We will begin to see scrutiny of the referral relationships; quality and costs scores are available on the CMS Physician Compare website allowing high performing groups to select referral partners who demonstrate a high quality and cost efficient protocol.

As mentioned, controlling readmissions through more effective follow-up and transition of care will reduce costs. Administrators should also monitor lab utilization, radiology utilization and the visit performance ratio available in the big data reported by many carriers on each physician.  By tracking this information, and making clinical teams aware of the data, we can prepare processes to improve the patient outcome and drive down the cost of care.  It is crucial to review the CMS Quality Resource and Use Reports. The 2016 report is now available.  These reports will show you how you compare to your peers in quality and cost.  The feedback is essential in planning improvements and drilling down performance barriers.

If we identify the areas of high costs, most likely patients with certain high costs diagnosis, such as heart failure, we can utilize a Practice Improvement Activity to decrease costs and improve quality and patient outcomes. I have seen practices utilize multiple patient apps to engage the patient in improving their health along with their family.  Many practices may also utilize Chronic Care Management as a tool to improve outcomes, decrease cost and increase patient engagement. 

We will see more changes in 2018, more practices will participate in the Merit Based Incentive Program, some through the Virtual Group option. More groups will participate through ACO since many health systems have cast a net for providers to join their ACO.  Transition to value based care is occurring, physicians should meet more often for educational purposes and strategically plan for success.  A good administrator and a prepared clinical team can carry out a strategic plan but the physicians must buy in to the goals and be leaders in the effort.

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