Omicron-Affected Physicians Get a Break on 2021 MIPS Adjustments

Another form of collateral damage wrought by the pandemic is its impact on physician upward Medicare payment adjustments under the Merit-based Incentive Payment System, or MIPS. The abnormal case rates and utilization patterns created by COVID-19 have distorted the quality data on which MIPS adjustments are based. With that in mind, the Centers for Medicare and Medicaid Services (CMS) announced that it’s cutting participating physicians a break by giving them extra time to apply for an extreme and uncontrollable circumstances (E&C) waiver to minimize the impact of 2021 quality data on future Medicare payments.

How MIPS Works

In 2015, Congress passed and the president signed legislation called the Medicare Access and CHIP Reauthorization Act (MACRA) designed to reward physicians for delivering better care while controlling utilization. MACRA creates a new Medicare incentive program, called MIPS, that consolidates elements of the previous Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VBM), and Medicare Electronic Health Record (EHR) incentive.

The way it works: Eligible professionals (EPs) earn payment bonuses, payment penalties, or no payment adjustments at all based on a score of 0 to 100 for a performance year. The MIPS score is based on data from four performance categories. In 2021, the allocation was:

• Quality (40 percent of MIPS score);
• Meaningful use of certified electronic health records (EHR) technology (25 percent);
• Resource use (20 percent); and
• Clinical practice improvement activities (15 percent).

MIPS and the Pandemic

The first few years under MIPS, which officially launched in 2017, were good for clinicians. Thus, for example, 97.6 percent of participants received an upward payment adjustment on their 2020 Medicare Part B claims based on their 2018 MIPS score, with only 1.95 percent receiving a penalty. However, the past two years have been helter-skelter, forcing physicians to focus on putting out COVID-19 brush fires and set aside long-term efforts to improve quality, interoperability, and other MIPS performance category fields.

The good news is that providers who experience outlier performance years due to circumstances beyond their control can receive E&C waivers allowing for adjustment of that data. In November 2021, CMS provided an automatic exemption to individual physicians for 2021 to account for Omicron. However, relief didn’t extend to physician groups, who had until December 31, 2021, to apply for a waiver.

Then along came Omicron and a new outbreak of cases that forced many physician groups to relegate MIPS application work to a backburner. “The increase in COVID cases—and increased demands—coincided with the original E&C hardship application deadline at the end of 2021,” noted American Medical Association (AMA) president Dr. Gerald E. Harmon in a statement. As a result, physicians missed the opportunity to apply for a waiver and faced a negative payment adjustment for 2023.

CMS Extends the Waiver Application Deadline

At the urging of the AMA and other organizations, CMS has agreed to extend the waiver application deadline for not only physician groups but also virtual groups and alternative payment model (APM) entities to March 31. If the waiver is granted, their data will be re-weighted to account for the impacts of COVID-19. In addition, physician groups that didn’t submit data by the original Dec. 31 deadline will not be hit with a penalty.

Meanwhile, hospitals are hoping that they’ll get a break on their own 2021 quality and safety data. Last year, CMS granted hospitals a waiver from the requirement to submit their data for 2020 but hasn’t yet said whether it will do so for 2021.