Reducing Barriers to MIPS, Advanced APMs Could Promote Participation

Reducing barriers to Advanced Alternative Payment Model (APM) participation for physicians in rural areas could help promote value-based care and control rising Medicare spending, according to research from the US Government Accountability Office (GAO).

Both Medicare enrollment and spending are expected to increase in the coming years, highlighting the urgency to control expenditures within the program. Medicare payments to physicians account for around 18 percent of spending. In 2021, Medicare payments to 1.3 million physicians and other providers totaled $93 billion.

Incentivizing high-quality, efficient care not only improves patient experiences but can also help reduce Medicare spending.

GAO conducted reports in October 2021, November 2021, and February 2022 on the Merit-based Incentive Payment System (MIPS), Advanced APMs, and geographic adjustments to physician payments.

Under the Quality Payment Program, most Medicare physicians must participate in either MIPS or an Advanced APM. In MIPS, providers receive a positive, neutral, or negative payment adjustment depending on their performance score.

The October 2021 report found that at least 93 percent of providers in MIPS qualified for a positive payment adjustment, while less than 5 percent qualified for a negative payment adjustment between 2017 and 2019. Positive payment adjustments ranged up to 1.88 percent.

Provider groups reported that the performance category exemption and the low-volume threshold exemption reduced participation burden. Meanwhile, poor performance feedback, questionable impacts of some reporting measures, and a low return on investment created challenges for providers.

Under the Advanced APM track, providers are encouraged to share in the financial rewards and the risk of caring for Medicare beneficiaries. Participating providers who achieve a certain payment or patient count threshold receive an incentive payment.

The November 2021 report found that fewer providers in rural or health professional shortage areas participated in Advanced APMs in 2019. Specifically, the report found that 12 percent of eligible providers in rural or shortage areas participated in an Advanced APM, compared to 15 percent of eligible providers in other areas.

Based on their performance in 2017, 88 percent of rural providers earned the 5 percent incentive payment, with this share increasing to 92 percent in 2018.

However, providers in rural, shortage, or underserved areas reported challenges with transitioning to APMs. These providers struggled with financial resources and risk management. Some providers may be unable to finance the upfront costs of shifting from a fee-for-service payment system to APMs, while others may be wary of taking on financial risk.

Data and health information technology were also barriers, with providers lacking the data analytics to assess their performance in an APM and the certified EHR technology required for Advanced APMs.

Rural providers already facing administrative burdens and limited staff may not have adequate staffing resources and capabilities to transition to an APM. APMs may also present challenges for rural providers due to geographic limitations, participant limitations, and model design.

The report noted that CMS has implemented models that include upfront funding, technical assistance, and other elements to help providers in rural and underserved areas transition to APMs.

Outside the Quality Payment Program, geographic factors can impact physician payment adjustments. The geographic practice cost indices (GPCI) adjust physician payments to ensure they reflect geographic differences in physicians’ costs to operate a medical practice. The physician work GPCI adjusts payment based on the costs of physician labor.

The February 2022 report found that the work GPCI accounted for geographic variation in physician payments in 90 out of 119 localities. In 14 localities, the work GPCI value was below the level needed to reflect geographic variation, and in 15 localities, the value was above the required level.

Removing the work GPCI would decrease overall physician payments by $438.7 million, or 0.7 percent of all physician payments in traditional Medicare in 2018. Most payment localities would see less than a 2 percent decrease in payments if the work GPCI adjustment was removed.