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Understand How CMS Measures Cost Category for QPP MIPS

If you are familiar with QPP MIPS, you must know how it impacts the financial situation of medical practice. The better a clinician knows about its requirements, and more appropriately, they can compile relevant data to submit to the CMS (Centers for Medicare and Medicaid Services).

Today, our focus is not shedding light on the holistic view of this Quality Payment Program but the cost category measurement by CMS. Although there is no specific data to report in this category by clinicians or the MIPS Qualified Registries, still an acknowledgment of its measurement plan is better to score high.

An Overview of MIPS Data Submission

A clinician’s Medicare payments depend on four performance categories, Quality, Improvement Activities (IA), Promoting Interoperability (PI), and Cost. Each category has a certain percentage of score according to which CMS reviews the submitted data and marks points.

Based on that final score, clinicians either meet the minimum performance threshold or surpass the performance threshold to achieve incentives and bonuses.

Also, we, as clinicians, do not have to worry about cost data submission. But, a better approach is to know what measures are generally included for its performance measurement.

Cost Measures for MIPS Reporting

The cost measures in QPP MIPS reporting generally refer to the resources used to provide quality care to patients. In simple terms, these are the total expenses incurred in each episode, a more delicate way to measure cost performance.

Previously, in the MIPS starting years, cost measures calculated expenses throughout the year or during the hospital stay. Through this method, there remained a lot of ambiguity in many aspects of the final MIPS score.

So, how CMS measures cost performance for each clinician?

CMS reads submitted claims to estimate the accurate cost rate.

They recover all the Medicare-related information against the rendered services to beneficiaries during a specific time.

To be exact, the following measures capture data in the QPP MIPS cost category.

  • Total per capita cost
  • Medicare spending per beneficiary

Let’s get into the description of each measure.

Total per Capita Cost

MIPS eligible clinicians must consider that total per capita cost is not as simple as one thinks. Commonly known as the TPCC, it considers all Medicare Part A and Part B expenses throughout the respective MIPS performance year.

In this measure, a Medicare taxpayer identification number, TIN/National Provider Identifier number (NIP), is assigned to the beneficiary.

It accounts for:

  • The level of primary care services received by the patient, calculated as per the Medicare-allowed charges during the MIPS performance period
  • The level of specialty of the clinician rendered by the clinician

Primary care, in this regard, includes the evaluation and management services given in the hospital or the other non-inpatient setting, nursing facilities, and non-emergency settings. By strict definition of the QPP MIPS cost measurement, initial Medicare visit, the chronic care management, and wellness visit codes also come under the same umbrella.

Important Points to Remember

If a beneficiary does not receive services from any primary care physician, nurse practitioner, clinical assistant, or others during the MIPS performance year but from the non-primary care physicians, for instance, a specialist within the TIN/NPI, then TIN/NPI gets assigned to the other beneficiaries that offered most primary care services.

Medicare Spending per Beneficiary

Medicare spending per beneficiary is quite easy to understand than the first cost measure.

It takes into account the Medicare payment that it pays for the rendered services during Medicare spending per beneficiary episode before, during, and after a patient’s hospital stay.

According to the QPP MIPS reporting requirements and I quote:

“This cost measure also includes Medicare Part A and Part B claims during the episode, specifical claims from 3 days before a hospital admission, known as the index admission for the episode, through 30 days after hospital discharge.”

MSPB measure assigned to the individual clinicians for each admission identified by the TIN/NPI. Generally, the performance in this sector is gauged by the QPP MIPS data submission method. For instance, one can submit data individually or in a group or virtual group.


It is to note that there are specific criteria against which CMS will score your cost performance. Number one is individual physicians or a group of physicians must match the case minimum of beneficiaries.

  • For instance, you must have a minimum case of twenty cases to be attributed for the Total Per Capita Cost measure.
  • For the Medicare Spending per Beneficiary measure, clinicians must have a minimum of thirty-five cases.

Moreover, an insight into the MIPS Cost score is if a physician does not have enough cases for one measure, their score will be subjected to the other measure. These cost measures are also risk-adjusted, meaning, there is beneficiary-level risk involved that affects the incurred expenses or the quality outcomes. The AMA (American Medical Association) recognizes these risks; however, CMS measurement is still not ideal.


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  1. immaculate content, i like it

  2. On December 1, 2020 the Centers for Medicare and Medicaid Services (CMS) released its 2021  Final Rule  for the Quality Payment Program (QPP) with changes to the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). Here is a look at some key highlights of the QPP changes and how they could impact your practice.

  3. CMS Measure the cost category for QPP MIPS in very clear manners.

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