CMS Releases Episode-based Cost Measures

January 26, 2018


CMS released eight episode-based cost measures that were developed with stakeholder input through the Technical Expert Panel (TEP) and Clinical Subcommittee processes. The Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) mandates that CMS collaborate with clinicians and other stakeholder communities in the development of cost measures for potential implementation in the Merit-based Incentive Payment System (MIPS). Episode-based cost measures represent the cost to Medicare for the items and services provided to a patient during an episode of care.


These eight episode-based cost measures are the first set of measures CMS has released and they will be field tested before they are implemented. CMS has indicated that they will be establishing more Clinical Subcommittees in the future to develop additional episode-based cost measures.

CMS released the following eight episode-based cost measures:

Procedural Episodes

  • Elective Outpatient Percutaneous Coronary Intervention (PCI)
  • Knee Arthroplasty
  • Revascularization for Lower Extremity Chronic Critical Limb Ischemia
  • Routine Cataract Removal with Intraocular Lens (IOL) Implantation
  • Screening/Surveillance Colonoscopy

Acute Inpatient Medical Condition

  • IntracranialHemorrhage or Cerebral Infarction
  • Simple Pneumonia with Hospitalization
  • ST-Elevation Myocardial Infarction (STEMI) with PCI

Attribution of Episode-based Cost Measures

The intent of these measures is to attribute the costs associated with an episode of care to a specific clinician or clinicians. This is done through the use of trigger codes which are assigned to each measure.

  • The procedural episodes are assigned CPT or HCPCS trigger codes. These episodes are attributed to the clinician(s) reporting the trigger code(s).
  • The acute inpatient medical condition episodes are assigned MS-DRG trigger codes. These episodes are attributed to the clinician(s) rendering at least 30 percent of the inpatient evaluation and management services during the inpatient hospitalization for the associated MS-DRG.

For 2018, CMS carried over two measures from the Value Modifier program to estimate the Cost Performance Category for MIPS: the Medicare Spending Per Beneficiary (MSPB) measure and the total cost per capita measure. The Cost Performance Category contributes to 10 percent of the total 2018 MIPS final score with the weights of the remaining Performance Categories being Quality at 50 percent, Advancing Care Information at 25%, and Improvement Activities at 15%.

  • Episode-based cost measures background document is available here
  • List of episode-based cost measures and their trigger codes are available here (Excel spreadsheet will download)

For more information visit the McDermottPlus MACRA Resource Center or contact Sheila Madhani at 202-204-1459,

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