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CMS released the first major regulation under MACRA, setting forth the new rules under this game-changing law. For now, only physician offices – not hospitals – are governed by MACRA rules.

CMS published a rule on Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APM) incentives under MACRA. Taken together, CMS is now referring to the two payment tracks as the Quality Payment Program (QPP). In the proposed rule, CMS emphasized that MIPS and APMs are both tools to support three overarching goals: improving how clinicians are paid to incentivize quality and value, improving the way care is delivered, and making data more available and enabling the use of certified EHR technology to support care delivery.

CMS expects most clinicians to fall under the MIPS track in 2019:

“In the proposed rule, CMS emphasized that MIPS and APMs are both tools to support three overarching goals: improving how clinicians are paid to incentivize quality and value, improving the way care is delivered.”


The proposal defines which eligible clinicians will initially participate in the Quality Payment Program via MIPS, with CY 2017 proposed as the first performance period on which CMS plans to base the CY 2019 payment adjustment. Eligible clinicians include physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and groups that include such clinicians.

As outlined in MACRA, the proposal would consolidate three currently disparate Medicare quality programs into MIPS: 1) the Physician Quality Reporting System; 2) the Value-Based Modifier Program; and, 3) the ‘Meaningful Use’ of electronic health records. CMS proposes that eligible clinicians receive a composite score relative to their performance in each of four categories. Quality measures for these core domains will be selected annually, with the data regarding clinician performance on the measures made available via the Physician Compare website.

The four performance categories are:

1. Quality: 50 percent of total score in year 1;

2. Advancing Care Information: 25 percent of total score in year 1, formerly EHR Meaningful Use;

3. Clinical Practice Improvement Activities: 15 percent of total score in year 1, this is essentially the “new” domain added to the previously existing other three; and,

4. Cost or Resource Use: 10 percent of total score in year 1, based on Medicare claims data – no reporting necessary.


CMS approach to implementing the MACRA APM pathway through which eligible clinicians can become “qualifying participants” and earn statutorily specified incentives for participation. Advanced APMs must meet three proposed requirements deriving from the MACRA statute:

1. Required use of certified EHRs;

2. Payment for covered professional services based on comparable quality measures; and,

3. Either being an enhanced medical home or bearing more than “nominal risk” for losses.

Only six current APMs made the Advanced APM list in the proposed rule, one of which is not available until 2018:

  • Next Generation Accountable Care Organization (ACO) Model (21 current participants)
  • Medicare Shared Savings Program (MSSP) Track 3 (16 current participants)
  • Comprehensive End-Stage Renal Disease (ESRD) Care (CEC) – Large Dialysis Organization (LDO) arrangement (12 current participants)
  • MSSP Track 2 (6 current participants)
  • Comprehensive Primary Care Plus (CPC+) (available in 2017)
  • Oncology Care Model (OCM) two-sided risk arrangement (available in 2018)

A key element stakeholders have been looking for CMS to define is the degree of risk an APM must bear to quality. CMS has a “general applicable financial risk standard” that requires APMs to include provisions that, if actual expenditures exceed expected expenditures, CMS can withhold payment, reduce payment rates, or require the APM to incur a debt to CMS.

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