Hospital Impact—Providers beware: Performance under MIPS can influence overall patient volume

Rita Numerof
Rita Numerof

The Merit-based Incentive Payment System (MIPS) is an attempt by the federal government to characterize in a single score the value of a provider’s care relative to other providers. Though the program is not without its challenges and limitations, it does begin to give consumers some information they need to make informed choices and benefit from competition.

The healthcare industry is in the position of having this transparency imposed upon it via federal action because the providers themselves have been slow to tackle true accountability. A lack of actionable information has led to a situation where the country’s largest payer must provide both carrots and sticks to collect performance information from providers.

Over the long term, MIPS reporting has the potential to drive patient volume, either directly, through consumer choice, or indirectly, through network selections made by payers. There are significant implications for individual physicians, medical groups and the hospitals whose revenues depend on their referral streams.

To succeed in this new environment and gain market share, physician practices must be very careful about the choices they make regarding how they are evaluated. MIPS provides a great deal of flexibility in selecting the metrics that factor into the final score. For example, in the realm of quality, providers must choose six metrics from nearly 300 choices.

RELATED: MedPAC recommends redesign of MIPS

This huge range of possible metrics is one reason it will be difficult for consumers to compare physicians. If two specialists are reporting on totally different measures, how can that be a valid comparison?

However, this is why practices have to choose those metrics that they believe represent them favorably. To the extent that they understand their own practice patterns and their strengths and weaknesses, they are positioned to make better choices.

Providers also must understand the care experience through the eyes of consumers. Getting more feedback from patients in the course of their interaction would likely be a good place to start. There is every possibility that small things they do can have an outsized impact on patient experience.

Many physician groups have raised concerns about administrative burdens under MIPS, and the recent changes to the program were partially intended to address them. But this is still a heavy lift, and providers need to streamline the data collection that supports MIPS wherever possible in order to minimize overhead and ensure data integrity.

Under MIPS, providers will receive a composite score based on performance in four categories: cost, quality, clinical practice improvement and “advancing care information,” which replaces Meaningful Use. Composite scores create obvious concerns for providers regarding the reliability and validity of specific individual measures as well as weights used to create the composite. However, because consumers assume greater financial responsibility for healthcare services in this country, they’re likely to turn to simple, rolled up scores such as these to understand a physician’s overall performance.

This is an area where patient behavior is likely to change slowly at first, but then very quickly, before many providers are ready.

Older patient-consumers, who have built up years of “brand loyalty” to particular healthcare providers, are unlikely to switch en masse. But for younger individuals in the online-review generation, faulty but directionally meaningful rankings are the most normal thing in the world. These will probably have far more impact on the choices they make—just ask any restaurant owner what happens when a Yelp score goes down by a star.

Physician Compare has the potential to be an important source of information and empowerment for consumers, employers and payers, and ultimately it could be a significant driver of choice and competition. Thus, MIPS reporting could have impact beyond physician compensation under Medicare Part B. If the data points influence patients’ choice of physicians (directly, or via insurers or employers that steer them to the highest performing doctors), the scores may also influence a provider’s referral stream, reputation and overall market share.

Even with the recent changes made to soften the MIPS reporting requirements, healthcare executives do not have much time to ensure optimal performance in the aforementioned four core categories.

Rita E. Numerof, Ph.D., is president of Numerof & Associates, a firm that helps businesses across the healthcare sector define and implement strategies for winning in dynamic markets.