Study quantifies the cost to physician practices of participating in the Merit-based Incentive Payment System

MIPS participation used up 53 hours per physician per year among surveyed practices.

A recent study highlights the challenges faced by physician practices that participate in Medicare’s Merit-based Incentive Payment System (MIPS), with the authors saying the findings indicate “attention to reducing the burden of MIPS may be warranted.”

For a study published in JAMA Health Forum, researchers interviewed leaders of 30 physician practices across the U.S. The authors reported that in 2019, MIPS participation cost practices an average of $12,811 per physician and required a time commitment of more than 200 staff hours per physician.

Payment bonuses available through MIPS appear insufficient to cover the costs of participating, the authors noted. The maximum 2020 payment adjustment, based on 2018 performance, was 1.68%.

As established by the Medicare and CHIP Reauthorization Act of 2015 (MACRA), MIPS participation is mandatory for physicians to receive Medicare payments unless the practice instead takes part in an advanced alternative payment model (APM) or receives an exemption based on low patient volume. MIPS measures performance using various metrics in four broad categories: quality, cost, interoperability and practice improvement.

The key findings

As reported in the study, costs were higher for practices that participated in a MIPS APM ($15,410 per physician) compared with practices in “traditional” MIPS ($10,537). MIPS APMs differ from advanced APMs — which constitute a separate payment track in MACRA — in that MIPS APMs don’t include downside financial risk.

MIPS-related costs per physician also were higher for small ($18,466) and medium-sized ($13,631) primary care practices and small ($16,017) and medium ($9,690) general surgery practices compared with large multispecialty practices ($4,107). The authors noted that the only statistically significant difference was between small general surgery practices and large multispecialty practices.

The time drain from meeting MIPS requirements carries costs as well. Nursing staff and medical assistants spent 99.2 hours per physician on MIPS-related activities in 2019. “The study interviews suggest that the time was largely spent reviewing medical records, collecting information from patients and entering data into the EHR,” the authors wrote.

Meanwhile, the average physician at surveyed practices spent more than 53 hours per year on MIPS-related activities, equating to nearly $7,000.

“If physicians see an average of four patients per hour, then these 53 hours could be used to provide care for an additional 212 patients a year — equal to more than a full week’s work for a physician,” the authors wrote.

Looking ahead

Potential bonuses and penalties in MIPS will increase to 9% in 2022, up from 5% in 2020 and 7% in 2021. Yet “it is not clear whether these changes will generate rewards large enough to offset the costs of participation,” the authors wrote.

Between 2019 and 2020, for example, the bonus pool similarly was increased and the performance threshold to avoid penalties was raised, potentially affording qualifying practices a greater share of bonus funds. Yet the maximum reward decreased from 1.9% to 1.7% because 98% of participating practices qualified for bonuses.

Since MIPS is required to be budget-neutral, it may be hard for CMS to find the funding necessary to make the required investment of resources worthwhile in the context of a cost-benefit analysis. One policy consideration, the authors wrote, would entail “substantially reducing the number of measures used in [CMS’s] quality programs and relying more heavily on claims-based performance measures that do not require physician practices to collect and report data.”