Drs. Lee and Baker are left with two options: partial participation in MIPS to achieve a small payment incentive, or full participation to qualify for a maximum incentive. Both options will require reporting, but the Dermatology Associates of Richmond are no stranger to reporting systems, having participated previously in the PQRS and MU programs. They also have enrolled free of charge in DataDermTM, the AAD’s clinical data registry. Adopting an EHR system may involve a learning curve, but they have time since they only need to report measures over a 90-day period.
WEIGHING THE OPTIONS
After conducting some additional research, Drs. Lee and Baker reconvene to crunch the numbers. They calculate ROIs for two scenarios: partial participation by reporting two quality measures and full participation. To qualify for the maximum incentive, they would need to submit six quality measures, one high-weighted Improvement Activity, and five Advancing Care Information (ACI) measures. For purposes of comparison, they also calculate the cost of non-participation.
Non-participation
4% penalty for non-participation in 2017: $90,200
9% penalty for non-participation in 2020: $202,950
Bottom line: Over three years, non-participation will cost practice $563,750
Option 1: Moderate participation
EHR adoption: $60,000
EHR upgrade fees per year: $1,500
Submitting quality measures through DataDerm: $2,655 ($295 X 9 practitioners)
Staff time for reporting two quality measures through EHR/DataDerm: $7,244.19 ($804.91 [five hours of staff time] for each of nine practitioners)
Total cost in 2017: $71,399.19
Total cost by 2020: $105,596.76
Hypothetical 1% incentive for 2017: $22,5501
Cumulative 1% incentive by 2020: $91,562.051
Bottom line: Net cost to practice over three years = $14,034
Option 2: Full participation
EHR adoption: $60,000
EHR upgrades per year (fulfilling ACI requirements): $1,648
Submitting quality measures through DataDerm: $2,655 ($295 each for five derms and four NPC’s)
Staff time for reporting six quality measures through EHR/DataDerm: $10,141.92 ($1,126.88 [seven hours staff time] for each of nine practitioners)
High-weighted Improvement Activity: No additional charge (reporting quality measures through DataDerm counts as a high-weighted Improvement Activity).
Total cost in 2017: $74,444.92
Total cost by 2020: $117,779.68
Maximum incentive for 2017: $90,2001
Cumulative maximum incentive by 2020: $616,966.901
Bottom line: The practice would gain nearly $500,000 over three years
1 Actual increase will be based on comparison of measure score against CMS benchmarks.
THE DECISION
Drs. Baker and Lee agree that Dermatology Associates of Richmond should embrace full participation in MIPS in hopes of receiving a large incentive. Partial participation appears to be a sure money-loser in the first year, and full participation carries a significant risk of loss, due in large part to the initial outlay of adopting an EHR system. In both cases, however, the extra costs are significantly smaller than the penalty incurred for non-participation in MIPS.
Partial participation will continue to be a losing proposition. But full participation may put Dermatology Associates of Richmond on track for increasing profits over the next several years. Though there is no guarantee that the practice will receive the maximum incentive possible, it will break even at around one-fifth of the cumulative incentive for which it qualifies.