Cost Performance Category De-Mystified

The Cost performance category is an essential part of MIPS. Although clinicians don’t personally determine the price of individual services provided to Medicare beneficiaries, they can affect the amount and types of services that are provided to their patients. By better coordinating care and seeking to improve health outcomes by ensuring their patients

In 2019 the Cost performance category is worth 15% of clinician’s MIPS performance score. There are also episode-based cost measures that have been added for 2019. CMS uses Medicare claims data to calculate cost measure performance, which means clinicians do not have to submit any data for this performance category.

Cost Measures

Medicare Spending per Beneficiary

The MSPB measure assesses total Medicare Part A and Part B costs incurred by a single beneficiary immediately 3 days before an index admission through 30 days after hospital discharge. A qualifying inpatient hospital stay and compares these observed costs to expected costs.

MSPB Attribution

CMS “attributes” each MSPB episode to a single MIPS eligible clinician (identified by a single TIN-NPI) who billed the most significant amount of Medicare Part B claims during the period between the index admission date and the discharge date. However, for groups of clinicians who are participating in MIPS as a group, a single measure score will be calculated for and assigned to the group, based on combined data.

There are some exclusions of patients, such as if Medicare is the secondary insurance or the patient is deceased.

MSPB Case Minimum

The minimum case volume for the MSPB measure is 35, meaning 35 MSPB episodes must be attributed to a MIPS eligible clinician or group for the measure to be scored.

A clinician who is participating in MIPS as an individual will not receive a MSPB measure score if the clinician does not bill Medicare for Part B physician/supplier services furnished to beneficiaries.

MSPB Risk Adjustment

The MSPB measure is risk-adjusted to account for beneficiary age and illness severity. A beneficiary’s illness severity is determined by using the following indicators:

  • 79 Hierarchical Condition Category (HCC) indicators5 from a beneficiary’s claims during the 90 days before the start of the episode
  • Recent long-term care status
  • End-stage renal disease (ESRD) status
  • The Medicare Severity Diagnosis-Related Group (MS-DRG) code of the index hospital admission6

The MSPB risk adjustment method accounts for:

  • A beneficiary’s comorbidities (the presence of more than one simultaneous clinical condition) by including interactions between HCC variables and enrollment status variables
  • The reason a beneficiary qualified for Medicare—referred to as a beneficiary’s entitlement category
  • Disease interactions that are included in the Medicare Advantage risk adjustment model


MSPB Calculation

Total Per Capita Cost for all Attributed Beneficiaries (TPCC)

 The TPCC measure assesses total Medicare Parts A & B costs for a beneficiary during the performance year by calculating the risk-adjusted, per capita costs for beneficiaries attributed to an individual clinician or group of clinicians. The measure is calculated and expressed by CMS at the TIN or TIN-NPI level.

Numerator = Sum of the annualized, risk-adjusted, specialty-adjusted Medicare Parts A & B costs incurred by all beneficiaries attributed to an individual MIPS eligible clinician (TIN-NPI) or all individual eligible clinicians in a group (identified by TIN) that are participating in MIPS as a group.

Denominator = Number of Medicare beneficiaries who are attributed to an individual MIPS eligible clinician’s TIN-NPI (if participating in MIPS as an individual) or the number of all Medicare beneficiaries who are attributed to a group of individual eligible clinicians participating in MIPS as a group (TIN) during the performance year


TPCC Attribution

Beneficiaries are attributed to a single TIN-NPI based on the amount of primary care services a beneficiary received, and the clinician specialties that performed those services, during the performance year.

TPCC Calculation

TPCC Attribution

Two-step attribution process:

TPCC Case Minimum

  • The case minimum for the TPCC measure is 20. To be scored on the TPCC measure:
    • MIPS eligible clinicians participating in MIPS as individuals must have at least 20 different beneficiaries attributed to their TIN-NPI
    • Groups participating in MIPS must have a total of 20 beneficiaries attributed to TIN-NPIs across the TIN-NPIs under the group’s TIN
  • MIPS eligible clinicians and groups with 19 or fewer beneficiaries attributed to them won’t be scored on the TPCC measure.


TPCC Risk Adjustment Methodology

Two measures of risk are used in the TPCC risk adjustment methodology:

Separate CMS-HCC models exist for new enrollees and continuing enrollees. The new enrollee model accounts for each beneficiary’s age, sex, disability status, the original reason for Medicare entitlement (age or disability), and Medicaid eligibility, and is used when a beneficiary has less than 12 months of medical history. The community model is used when a beneficiary has at least 12 months of medical history. The community model includes the same demographic information as the new enrollee model but it also accounts for clinical conditions as measured by Hierarchical Condition Categories (HCCs).


Episode-based Cost Measures Overview

Episode-based measures assess the cost of the care that is clinically related to their initial treatment of a patient and provided during an episode’s time frame.

Episode-based measures differ from the TPCC and MSPB measures because they only include items and services related to the episode of care for a clinical condition or procedure, as opposed to including all services that are provided to a patient over a given timeframe. The episode-based measures are categorized into “episode groups.”

Episode groups:

  • Represent a clinically cohesive set of medical services rendered to treat a given medical condition.
  • Combine all items and services provided for a patient group to assess the cost of care
  • Are defined around treatment for a condition or performance of a procedure.
  • Attribution: Episode-based Cost Measures

Procedural episodes are attributed to MIPS eligible clinicians who render a “triggering service,” which is identified by HCPCS/CPT procedure codes.

For acute inpatient medical condition episodes, we will attribute episodes to each MIPS eligible clinician who bills inpatient evaluation and management (E&M) claim lines during a trigger inpatient hospitalization under a TIN that renders at least 30 percent of the inpatient E&M claim lines in that hospitalization.

A trigger hospitalization is defined as a hospitalization with a particular Medicare Severity Diagnosis Related Group (MS­DRG) identifying the episode group. Relevant MS-DRGs and trigger rules are identified in the measure methodology documents.


Risk Adjustment Methodology for Episode-based Measures

Risk adjustment methods for the eight episode-based measures in both episode groups:

Risk adjustors are identified using beneficiaries’ Medicare claims history during the period before the start of the episode. Claims from the triggering hospitalization or on the triggering Part B Physician/Supplier claim are typically not included. The risk adjustment method used for each episode-based measure is enhanced/customized by the use of risk factors specifically adapted for each episode group.



For a cost measure to be scored, an individual MIPS eligible clinician or group must have enough attributed cases to meet or exceed the case minimum for that cost measure.

To calculate Cost performance category score in 2019, CMS will assign 1 to 10 achievement points to each scored measure based on the MIPS eligible clinician or group’s performance on the measure compared to the performance year benchmark.

As a result, the achievement points assigned for each measure depends on which decile range you or your group’s performance on the measure is in between.

2019 Cost Performance Category Scoring Example

In the example above:

The group’s Cost performance category score is (47.6/70=0.68), which is equal to a Cost performance category percent score of 68%. Because the Cost performance category is worth 15 points in the MIPS final score, this group would earn 10.2 points towards their final score (68 x .15=10.2)

Cost is an essential part of MIPS and the weighting will be increasing each year. It is important to get familiar with this category and look for ways to improve your scores. We will discuss ways to improve Cost category scores at our upcoming Office Hours event.

SOURCE: QPP Cost User Guide