QPP Final Rule: Real Costs And Virtual Groups

November 2017

On November 2, CMS issued the final rule for the Quality Payment Program. One issue addressed in the rule is the creation of “virtual physician groups” for quality reporting.  Many smaller practices had hoped to use a virtual grouping option within the Merit-based Incentive Program (MIPS), but CMS acknowledges in the final rule that there is too much administrative burden in too little a window of time to make the option practical for most in 2018.[1] As a result, CMS projects that only 16 virtual groups will form next year. Whether virtual grouping reduces the burden and cost of MIPS participation enough to offset the investment required to form such a group remains an open question.

One question CMS does settle in the final rule is weighting and scoring of cost measures for MIPS. As widely reported, the cost category weights at 10 percent of the total scoring for 2018. To eliminate reporting burden, CMS will use only administrative claims to calculate a total per capita cost measure and a Medicare Spending Per Beneficiary measure.




Cost category reporting represents no burden for MIPS participants, but quality category reporting is projected to mean a 30 percent increase in administrative burden.[2] Burden will vary depending on the choice of data submission mechanism. Quality category reporting offers four data submission mechanisms. In order of highest burden to least, they are:

1) Claims

2) Qualified Registry (QR)/Qualified Clinical Data Registry (QCDR)

3) EHR

4) CMS Web Interface.

CMS Web Interface is only open to groups of 25 or more and requires those groups to submit the same measures for each clinician. It follows that the potentially least burdensome scenario for individual clinicians and groups of ten or less is to form a virtual group and report through the CMS Web Interface.

To form a virtual group and report through the CMS Web Interface effectively means establishing an agreement with similarly situated MIPS participants. Beyond satisfying the CMS administrative criteria for forming a virtual group, all group members should share understanding of a set prioritized opportunities before forming the virtual group. Among other advantages, it allows the best positioning for using the least burdensome approach to reporting. However, it also relies on every clinician being ready, willing and able to perform on the same set of quality measures.

For individuals and groups of 10 or less MIPS participants, 2018 should be “the year of the quality strategy” to identify the actions and conditions for success long-term.

Here are ten questions that help answer whether a virtual group arrangement might make sense.

The largest and most important question to answer is:

  1. Do we have a quality strategy that prioritizes opportunities that are most meaningful to our patients and allow for success in MIPS?

The following table describes opportunities and challenges associated with seizing those opportunities.

Actions and Conditions for Success Challenges and Barriers
One: Deploy an improvement strategy that optimizes performance in MIPS by relying on carefully selecting measures, activities, and tools that demonstrate above average value. MIPS provides so many options for fulfilling reporting requirements that tailoring an approach to individual circumstances requires tradeoffs.

A cost-benefit analysis of these tradeoffs must balance practice needs with some estimation of how it affects MIPS scoring.

· Practice will receive a negative payment adjustment should it underperform on the measures it selects.

· Remember that in MIPS various bonus scoring, risk adjustment, and other criteria factor into a reimbursement scheme that rewards above average performance

Two: Selections must support a multi-layered approach to quality that aligns accountability at individual and group levels while simultaneously supporting improved performance in areas closely tied to options for MIPS reporting. As MIPS participants gain experience, performance thresholds will increase, and CMS reserves the right to adjust or retire topped out measures.

· Selection of measures and updating what the practice reports should become part of annual strategic planning.

· Practices with high performance and similar reporting priorities may seem an attractive virtual group partner one year, but fail to perform on par or above the next.

· Individual accountability is important to understand how nimble a quality strategy is in closing smaller gaps and prevents leaving behind certain group members long-term.

Three: Superior performance on individual measures is helpful, but does not in itself lead to sustainable improvements that position practices well to continue earning enhanced reimbursement in MIPS and elsewhere in the value-based environment. With the composite score in MIPS representing many different quality-related efforts, short periods of improvement or narrow areas of improvement based on one-time benchmarking efforts will not promise continued success.

· The general principle for a good virtual group partner is that that partner has a comprehensive and nimble quality strategy as a high priority in its long-term planning goals.

· Goal-setting toward a one-time benchmark is important for short-term planning, but more wholistic assessments are necessary for long-term planning

· Benchmarks will likely be higher in the data reporting mechanisms used by large groups, who themselves typically have more experience and resources for quality reporting

o   QR/QCDR options can provide access to a large set of options for measurement that are sometimes better tailored to certain specialties that have fewer available measures

o   Switching reporting mechanisms, such as moving from claims to the CMS Web Interface may lead to a decrease in MIPS score without an actual decrease in performance


As a MIPS participant seeking potential virtual group mates, in light of established quality strategy priorities, consider:

How private payer initiatives inform efforts to form a virtual group.

  1. Are you part of a preferred network that has established quality and cost requirements for your practice type and setting?
  2. Do you notice any colleagues in the same network that you could engage with to leverage your shared network status?
  3. Are there public reporting programs that allow you to locate and assess how others perform on the key priority areas of your quality strategy?

How professional education and research activities inform efforts to form a virtual group

  1. Whom can you locate among your professional society’s membership directory that engages in the same continuing education, maintenance of certification and other improvement activities?
  2. Are their QR/QCDR options available? If so, are there other individuals and small groups of ten or less submitting quality data that align with your strengths and priorities?
  3. Are you engaged in studies or investigations with other sites or principal investigators that have shared interests in quality?
  4. Does forming a virtual group that applies the selected quality strategy create an opportunity for health systems research grant funding to assess impact?

How third-party vendors inform efforts to form a virtual group

  1. What built-in data-enabled health improvement efforts, such as clinical decision support, or clinical benchmarking, are in deployed systems and are there other users you could partner with that employ the same tools to advance your strategy?
  2. Do any of the advances in quality you have already made leverage an approach or set of tools from a common source and are the third parties offering these able to connect you with others in their client base who share quality strategy priorities?

What to look for in 2018 and beyond

The virtual group elections are due by December 31, 2017 for Performance Year 2018. So, for most considering the option, the realistic objective would be planning toward an election for Performance Year 2019, meaning a deadline of December 31, 2018.

Regardless of success in establishing a virtual group, working through the planning process and deploying a sound quality strategy described above will better position a practice to succeed in value-based care. Those eligible for the option should start early and look to the inaugural class of virtual groups for cues on administrative burden. The largest administrative hurdle for potential virtual group participation is likely contracting. Every clinician participating in Federal Healthcare Programs must already conform to Conditions of Participation and Conditions of Payment, which include attestation of compliance with all Federal health care fraud and abuse laws. However, in this year’s QPP final rule, CMS has restated these health care fraud and abuse requirements specifically in the necessary criteria for virtual group agreements. Solo and small practices may not have the access to or resources for legal advice required to move forward.

[1] CMS estimates there will be 765 MIPS eligible clinicians who can timely meet the final rule’s virtual group election criteria. The inaugural class of virtual group members will have only 60 days to form, despite CMS acknowledging it could take 6 months to complete the necessary planning. See FR at 1196 “We assume that  virtual  group  participation  will  be relatively  low  in  the  first  year because we  have  heard  from  stakeholders  that  they  need  at least  3 to  6 months   to form  groups  and establish agreements before  signing  up.  We are not able  to give  them  that  much  time  in  the  first year,  rather  closer  to  60 days.  Because  of this,  we expect  the  number  of virtual  groups  will   be very  small  in  the  first  year of virtual  group  implementation.”

[2] Increase is an aggregate percentage calculated by comparing the PQRS 2016 final rule estimates with the equivalent final rule estimates in QPP Year 2. OMB used PQRS 2016 actual participation numbers to forecast burden for QPP Year 2.

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