Development of a Knee Arthroplasty Episode-Based Cost Measure for Evaluating Cost in the Merit-Based Incentive Payment System.

BACKGROUND: Under the Merit-based Incentive Payment System (MIPS), the U.S. Centers for Medicare and Medicaid Services (CMS) evaluate clinicians who manage Medicare patients on the basis of cost and quality outcomes. CMS contractor Acumen, LLC, convened an expert panel to develop a knee arthroplasty episode-based cost measure (EBCM) for use in the MIPS. METHODS: A Clinical Subcommittee of 28 clinician experts affiliated with 27 specialty societies provided guidance in developing the knee arthroplasty EBCM. The Clinical Subcommittee specified all aspects of the EBCM including triggering of the episode, services within the episode, risk adjustment, subgrouping, and exclusions. Services were counted only if the Clinical Subcommittee deemed them under the influence of the clinician assigned to the EBCM (selective service assignment; SSA). We assessed the reliability of the EBCM and compared it with an alternative population-based cost measure constructed without SSA. RESULTS: We identified 249,301 knee arthroplasty episodes from June 1, 2016, to May 31, 2017, with 10,681 clinicians having at least 10 attributed episodes. The mean episode cost was $19,321 with a standard deviation of $1,816. SSA increased the reliability score from 0.71 to 0.81 relative to an alternative measure that counted all patient costs. SSA also led to reclassification of 41.8% of clinicians into different quintiles of performance. CONCLUSIONS: We found that the use of SSA in the creation of the EBCM substantially reduces random noise (i.e., unrelated medical procedures or costs) and offers a tool for assessing clinicians' costs of management that is focused on care directly related to knee arthroplasty.

Development of Episode-Based Cost Measures for the US Medicare Merit-based Incentive Payment System.

Importance: The Merit-based Incentive Payment System (MIPS), established as part of the Quality Payment Program, is a Medicare value-based payment program that evaluates clinicians' performance across 4 categories: quality, cost, promoting interoperability, and improvement activities. The cost category includes novel episode-based measures designed for targeted evaluation of the resource use of specific conditions. This report describes the development of episode-based cost measures and their role in the shift from volume-based to value-based purchasing. Objectives: Episode-based cost measures focus on resource use related to the treatment of a specific condition or procedure. The measures exclude health care costs unrelated to the condition or procedure of focus. The episode-based cost measures provide a nuanced examination of resource use that can be used alongside quality metrics to identify opportunities to improve the value by capturing costs that are clinically related to the care being delivered within a given patient-clinician relationship of care delivered to patients. These measures were developed with the input of clinical committees composed of over 320 clinicians from 127 specialty societies and stakeholder organizations. The MIPS program currently evaluates clinician cost category performance based on 2 population-based cost measures (Medicare spending per beneficiary and total per capita costs) in addition to 18 episode-based cost measures. Additional episode-based cost measures are currently under development. Conclusions and Relevance: The transition to value-based payment requires an accurate assessment of clinician effect on health care quality and cost. The use of episode-based cost measures to assess clinician influence on health care costs for high-priority conditions and procedures is an important step. The Centers for Medicare & Medicaid Services is introducing MIPS Value Pathways that will align episode-based cost measures with related quality measures to further incentivize the transition from fee-for-service to value-based care.

Adjustment For Social Risk Factors Does Not Meaningfully Affect Performance On Medicare's MIPS Clinician Cost Measures.

Medicare's Merit-based Incentive Payment System (MIPS) includes episode-based cost measures that evaluate Medicare expenditures for specific conditions and procedures. These measures compare clinicians' cost performance and, along with other MIPS category scores, determine Medicare Part B clinician payment adjustments. The measures do not include risk adjustment for social risk factors. We found that adjusting for individual and community social risk did not have a meaningful impact on clinicians' cost measure performance. Across eight cost measures, 1.4 percent of clinician groups, on average, had an absolute change in their cost measure performance percentile of 10 percent or more (range, 0.4-3.4 percent). Prior analyses have generally found higher health care costs for patients with increased social risk. MIPS episode-based cost measures are distinct from previous cost measures because they only include costs related to the specific condition being evaluated. This unique approach may explain why costs were similar for patients with high and low social risk before any risk adjustment. MIPS episode-based cost measures do not appear to penalize clinicians who primarily care for patients with increased social risk.