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How Medicare MIPS Penalties Negatively Impact Your Bottom Line

June 15, 2017


The year 2017 marks one of the most significant year for Medicare changes in history as MACRA (Medicare Access and CHIP Reauthorization Act) takes full effect. This particular legislation includes the introduction of MIPS, the Merit-based Incentive Payment System, which in turn impacts the management and reporting of performance measures throughout the medical community. If you don’t fully understand the new MIPS penalty regulations work, you may not see how it’s negatively impacting your bottom line until its too late. 

What is MIPS?

MIPS is a measurement system for eligible clinicians that includes the following weighted measures for calendar year 2017:

  • Quality – 60 percent
  • Advancing Care Information (ACI, renamed from Meaningful Use) – 25 percent
  • Clinical Practice Improvement Activities (CPIA) – 15 percent
  • Resource Utilization – zero percent, but starting in 2018 this particular measure will have a weight

What’s more important to note is that MIPS penalties are delayed by two years, so anything occurring in calendar year 2017 will be reported in calendar year 2019. MIPS impact can be in the millions of dollars, so understanding this legislation is particularly important — especially as the impact will continue to grow over the next several years. Just as incentives are returned to high-performing practices, penalties for non-compliance or reduced compliance will have a measurable and negative financial impact on practices throughout the country who are not prepared. With a maximum score of 100, if your MIPS score is less than 25 percent of the maximum your practice will incur the maximum penalty. However, full compliance comes with benefits: in the form of an added boost to your Part B payment. 

MIPS Participation

With 2017 being a transition year, it’s relatively simple to avoid penalties and much easier to earn a bonus. If you are not exempt, here’s some general levels to keep in mind:

  • No participation equals a negative four percent penalty on payments
  • Submitting a few Quality, ACI or IA measures will allow you to avoid a penalty
  • Submitting data for at least 90 days during the 2017 calendar year qualifies you for neutral or positive adjustments
  • When you submit a full year of data for calendar 2017, there’s a good chance that you’ll receive a positive payment

The Performance Threshold (PT) will continue to shift as years pass to ensure that providers are brought on board and continue to improve. 

Extended Impact

The impact of MIPS on clinicians goes beyond the basic penalty or payment boost that you receive from Part B. You’ll also see this number noted on a variety of government websites where physicians are ranked according to various scores. Those with a higher MIPS score will find it easier to grow their practice and attract lucrative clients. Individuals looking for medical care are very likely shop around, and ratings can be a big part of that decision of where to get their medical treatments. These publicly-published results provide a transparency that hasn’t been available in the past.

Strategic Planning

Understanding the financial mechanics of MIPS has far-reaching impact on your strategic planning, as it can affect your public reputation, forecasting and even potential merger and acquisition activity. When margins are slim, it’s important to gain every possible advantage to keep your business in in the black. While 2017 is essentially a learning year, starting in 2018 the impact of this significant legislation will begin to be felt. 

One of the best ways to ensure compliance is through consistent and accurate reporting. M-Scribe allows you to improve your profits and reduce billing costs by standardizing your medical billing. This software-agnostic service provides complete transparency and exceptional processing speed — all backed up by an incredible team and the service that you deserve. Learn more about the financial impact of MIPS and how M-Scribe can help you reach your goals.


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