Repeal and Replace, Part II: Improving Pay-for-Performance in Medicare
To develop a more effective Medicare pay-for-performance program, policymakers should:
- Build on experience and the literature to develop evidence-based program principles
- Engage clinicians to address the heterogeneity of practice structures, specialties, and conditions
- Emphasize broad program principles over detailed parameters in any new legislation
- Plan to evaluate the program on an ongoing basis
Medicare’s Merit-based Incentive Payment System (MIPS) assesses how well physicians and certain other clinicians perform in terms of the quality and cost of the care they provide to Medicare beneficiaries, their use of electronic health record technology, and their completion of practice improvement activities. Despite efforts to make MIPS successful, the program is unpopular, and the Medicare Payment Advisory Commission and others have called for its repeal. This brief discusses the merits of replacing MIPS and cautions against installing a new replacement program without adequate testing. Instead, it recommends taking an evidence-based approach that at least temporarily reduces data reporting requirements for program participants while Congress and the Center for Medicare & Medicaid Services establish the foundation for a more robust incentive program that draws heavily on lessons learned from past experience, formative testing, clinician input, and ongoing program evaluation. Rather than being deployed immediately at scale, any new program should scale up over time as evidence of its effectiveness based on more limited testing accumulates.