Merit Based Incentive Payment System Cost Category: What it means to your Oncology program

The Centers for Medicare and Medicaid Services (CMS) in its October 2016 ruling has finalized the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which eliminated the Sustainable Growth Rate (SGR) formula with the Quality Payment Program (QPP).  Providers can choose one of two tracks; Merit Based Incentive Payment System (MIPS) or Alternative Payment Model (APM). These two tracks don’t necessarily replace fee for service, however, they will effect payments positively or negatively depending on whether value measures are obtained. Unfortunately, a recent Medscape study found that 28.6% physicians said they have not heard of MACRA and 39.2% said they have but know little out the new paradigm. The Cost category which replaces the Value-Based Payment Modifier (VBPM) doesn’t go into effect until year 2018 where it will represent 15% of total MIPs scoring increasing to 30% in 2019. This delay may invoke an “out of sight, out mind” mentality, however, providers must prepare now for this fourth category or else risk being penalized.

How will CMS assess this category? 

Data will undoubtedly be king. CMS will calculate the Cost category based on claims and use Hierarchical Condition Categories (HCC) for predictive analysis where diagnosis is tied to a score. CMS will tag which services are provided to a patient on how a provider codes the ailment to ICD-10 classification.

What should oncology programs do?

Cancer programs must ensure that physicians code correctly or face being penalized because a diagnosis may not indicate a patient ailment severity consistent with the amount of services provided. Therefore, if a provider does not code to the correct ICD-10 and to their highest level of specificity, then the billed charges linked to those codes will be tied to a lesser cost code, and thus, the HCC scoring will be lower which would result in penalizing the provider for doing more services than the HCC scoring dictates. Correct ICD-10 and CPT coding becomes very important in year 2017 despite the Cost measure delayed calculation commencing in 2018.

How can we help?

At Churchill Consulting, a subsidiary of Crux Quality Solutions, we have encountered through numerous audits, many errors in ICD 9 and now ICD 10 coding. We highly encourage cancer centers to seek out our auditing expertise for ensuring correct coding of diagnoses and services as well as our software solution Directrees® for determining accurately medically necessary charges per treatment regimen which leads to accurate claim submissions. Please see the link below for a demonstration of Directress® and our Churchill services.

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