Indirect MIPS Cost Penalty for Use of Critical Access Resources

Critical Access Hospitals (CAHs) are provided additional reimbursement above Medicare allowed fees for their services.  Patients are not generally affected directly by the hospital bonus, other than the additional fees serve to help these small facilities remain in business in a high need area.  Unfortunately, the bonus payments contribute to the TOTAL per Capita Cost (TCC) of care for attributed patients with regard to MIPS. Supplemented services from Federally Qualified Health Centers (FQHC) and Rural Health Centers (RHC) are also considered in the TCC. Total cost includes every medical dollar spent on a patient, regardless of which provider ordered the services.

Why this matters –  Under MIPS, the cost component and spending efficiency (QRUR) from 2018 spending will affect 2020 payment adjustments.  In effect, providers who utilize CAHs for hospital or ancillary services are penalized for using these artificially inflated higher cost services.  While providers in FQHCs and RHCs are not impacted by MIPS, providers outside those clinics whose patients occasionally use these resources certainly are impacted and penalized.  CMS has been made aware of this apparent calculation flaw, understanding that this penalty runs counter to their efforts to support these facilities in the first place.  If your practice or organization may be affected by this seemingly unintended penalty, you are encouraged to reach out to your state rural health association, CMS regional office, and to your regional Medicare Quality Improvement Network.

For more information about the Cost Performance Category of MIPS, click here.