The Medi­care Access and CHIP Reauthori­zation Act (MACRA) went into law over a year ago. 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 proposed 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 to pay APM incentives to between 30,658 and 90,000 clinicians in 2019. This is in contrast to the 687,000-746,000 eligible clinicians whom the agency expects to receive payment adjustments through MIPS in 2019.”


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

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-of-care (50 percent);

2. re­source use (10 percent);

3. meaningful use of EHRs (25 percent);

4. clinical practice improvement activities (15 percent).

Quality-of-care metrics must include patient experience.

Alternative Payment Models (APMs)

CMS proposes an 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 proposes a “generally 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.

CMS expects to pay APM incentives to between 30,658 and 90,000 clinicians in 2019. This is in contrast to the 687,000-746,000 eligible clinicians whom the agency expects to receive payment adjustments through MIPS in 2019.

Seven Key Things You Should Know About the MACRA Proposed Rule

MACRA is a transformative law that builds a new, fast-speed highway to take the healthcare system away from the fee-for-service system and toward new risk-bearing, coordinated care models.

“Once the program is up and running, physicians can pick one of two routes that will determine how they will be paid: Merit-Based Incentive Payment System (MIPS) or an advanced alternative payment model (APM).”

1. This rule applies only to physician practices and to Medicare

For now, only physician offices – not hospitals – are governed by MACRA rules. In addition, this program only ap­plies to payments physicians receive from Medicare. Medicaid is not included.

2. Performance data from 2017 will determine payment in 2019

With Medicare payments or penalties under MACRA being handed out starting in 2019, that can feel like a long time away. But it’s closer than many physicians may realize.

Keeping to tradition, CMS plans to use data collected in 2017 to determine payment adjustments for 2019.

3. MACRA’s two paths to payment

The MACRA (Medicare Access and CHIP Reauthorization Act) proposal retains the structure that policymakers had previously laid out. For starters, all physicians will receive a 0.5% reimbursement rate increase from 2016 through 2019.

Once the program is up and running, physicians can pick one of two routes that will determine how they will be paid: Merit-Based Incentive Payment System (MIPS) or an advanced alternative payment model (APM).

4. Most physicians will start with MIPS

All physicians – with a few exceptions – will report through MIPS in the first year of the program. That data will then be used by CMS to determine which pro­viders met the requirements for the APM track. Physicians are not locked into their choice – they can switch between MIPS and APM annually.

5. MIPS will pay physicians based on four performance categories

Broadly speaking, MIPS will combine Medicare’s existing payment programs – the physicians quality reporting system (PQRS), meaningful use of electronic health records (EHRs) and the value-based modifier – into one program.

MIPS will adjust physician pay based on their total composite performance score, which will be determined from four categories: Quality care, cost-of-care/re­source use, clinical practice improvement activities and the newly-branded “ad­vanc­ing care information” program, which is the new name for a modified meaningful use program. Here’s a breakdown of how each category will be weighted:


Here is a brief summary of how physicians will be scored on these categories, and what work it will require on the part of the physician, according to a CMS fact sheet:

Quality: This is essentially a modified PQRS. Physician would choose six quality measures to report on from a list of options tailored to specialty and practices. Currently PQRS requires physicians to report on nine quality measures.

Advanced care information: This is meaningful use, but with some new flexibility. Under the new program, physicians will get 50% credit simply for attest­ing. The rest of the score (in fact physicians can exceed the maximum score) will be based on performance on measures that cover categories such as patient electronic access to health information, care co­or­dination and patient engagement and elec­tronic exchange of health information.

Clinical practice improvement ac­tivities: Physicians will need a score of 60 points in this section by participating in programs to improve their practices in the areas of care coordination, patient engagement and patient safety. Activ­i­ties are worth either 20 points or 10 points, with higher-weighted activities contributing to those that support the PCMH model or practice transformation. There are more than 90 choices for physicians to pick from, in these 9 categories:

  • Expanded patient access
  • Patient engagement
  • Achieving health equity
  • Population management
  • Patient safety and practice assessment
  • Emergency preparedness and response
  • Care coordination
  • Participating in an APM, including a PCMH
  • Integrated behavioral and mental health

Cost: This replaces the value-based modifier. The good news is that there is no extra work for physicians; CMS will calculate these scores based on Medi­care claims.

6. The APM Route

CMS anticipates more providers will qualify for the APM route after the first year and move in this direction. In 2019 through 2024, physicians participating in APMs would receive a lump sum payment of 5% of their prior year Medicare Part B payment.

Broadly speaking, APMs are payment models such as accountable care organizations (ACOs) and patient-centered medical homes (PCMHs). The MACRA rule says APMs must meet three requirements to qualify:

  • participants must use certified EHR technology;
  • the APM must pay clinicians based on quality measures comparable to those used in the quality performance category of MIPS; and
  • be either an accredited PCMH or participate in risk-sharing as part of an ACO-like arrangement or, as the rule puts it, “bear more than a nominal amount of risk for monetary loses.”

The proposed list of models that would qualify for primary care physicians in­clude: the new Comprehensive Primary Care Plus program, Medicare Shared Sav­ings Program, or Next Gen­era­tion ACOs. CMS says it will update the list of qualified APMs annually.

7. Does this change meaningful use right now?

2016 is the final year physicians will be subject to penalties under the meaningful use program as it’s configured now, and 2017 will be the first year phy­sicians will be assessed based on the new advancing care information program. Any penalties levied based on meaningful use attestations from this year would be assessed in 2018.

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