With two years of Merit-based Incentive Payment System (MIPS) reporting now in the books, many participants have been eager to see the fruits of their labor, even if they were prepared for modest bonuses based on their submissions from the 2017 transition year.
However, we’ve recently been contacted by a number of clients who are concerned that their MIPS payment adjustments appear to be showing up on 2019 Medicare EOBs as a negative amount when they were instead expecting a small bonus.
Initially, we were also confused by this development since the MIPS feedback reports for the clients in question showed they were slated to receive a bonus. Fortunately, a bit of due diligence on the part of our auditors led us to discover that the bonuses are being applied correctly, just in a different format than anticipated.
When applying the bonus payment, Medicare first takes the allowed amount and subtracts any patient responsibility. Once that figure is obtained, an additional 2 percent is subtracted for sequestration. The remaining amount is used as the basis for applying the applicable bonus or penalty.
While this news isn’t particularly impactful for 2019 given that the maximum Medicare bonus most individuals and groups could earn fell below 2 percent, understanding how these adjustments appear when correctly applied will be crucial in ensuing years as more MIPS participants fail due to the rising reporting burden required to avoid penalties. Because the program is budget neutral, an increase in poor performers will create a larger bonus pool for those who manage to successfully report.
Keep in mind that bonuses and penalties for the 2019 reporting year can reach up to +/- 7 percent. As always, there is a two-year gap between the MIPS reporting year and the corresponding payment year (ie: 2019 reporting affects 2021 payments).
If you believe your lab or group is being unfairly penalized for MIPS when you should be receiving a bonus or neutral adjustment, feel free to reach out to us at 517-486-4262 to schedule a review.