Changes to MACRA are all about getting paid for quality

Medicare Access and CHIP Reauthorization Act (MACRA) final rule has been released, changing the playing field by repealing the long-delayed Medicare Part B Sustainable Growth Rate (SGR) reimbursement formula and replacing it with a new Quality Payment Program (QPP).

The proposed QPP has two goals:

  1. Reduce quality reporting burdens
  2. Modify reimbursement models: Advanced Alternative Payment Models (APMs) and Merit-based Incentive Payment System (MIPS)

Based on historical patterns of physicians reluctant to take at-risk contract reimbursement and their lack of experience managing bundled payments, the initial trend will be toward the MIPS model more than APMs.

Given quality measures are over half the score, emphasis on excelling is key 
and ensuring the right quality measures is paramount.

What is MIPS?

There appears to be a rumor in the industry that MIPS has replaced Meaningful Use, and that MU will be going away; This is not the case.

Beginning in 2017, according to the MACRA final rule, existing EHR incentive programs of Meaningful Use (MU), Physician Quality Reporting System (PQRS), and Value-Based Modifier (VBM), will become part of MIPS model. The difference is MIPS changes performance measures for reimbursements under MU, PQRS, and VBM, versus replacing it completely by having CMS compare  physician performance to predetermined national performance thresholds. 

Based on the data of the 4 components below, adjustments will be made to the Medicare Physician Fee Schedule (MPFS) payments. There will be incentives for those who scored above the national threshold, and penalties for those who scored less.

  1. Quality – Deriviative of PQRS
  2. Advancing Care Information (ACI) – Derivative of Meaningful Use measures
  3. Clinical Practice Improvement Activities (CPIA) – New
  4. Cost/Resource Use – Derivative of VBPM initiative with added measures

The difference is MU required 90-day reporting provision, MIPS encourages active reporting throughout the year and aligned reporting options for clinicians. 2017 is the transition year, and multiple thresholds are set lower to encourage participation. One key benefit for the public, beyond improved information sharing and competition for quality dollars, is these performance reports will be made available to the public by CMS.

Refinement of familiar concepts means MIPS is not a dramatically new program but an attempt at a more efficient and effective one.

Reporting components are focused on


*Cost refers to both cost and resource usage.


How does a clinical professional become eligible or exempt?

All physicians and non-physicians enrolled in Medicare qualify as MIPS-eligible Clinicians and as such are required to report on 2017 performance measures, and will receive a 2019 fee schedule payment adjustment.

Initially in 2017 only those clinicians who bill for Medicare Part B, or Critical Access Hospital Method II, will be eligible. Others are excluded from MIPS eligibility determination, but will be subject to reporting under MACRA APMs guidelines.

Out of the gate, MIPS measures will only cover physicians (MD/DO and DMD/DDS), physician assistants, clinical nurse specialists, and certified registered nurse anesthetists, but ultimately will expand to include all other clinical providers such as therapists, pathologists, clinical social workers, clinical psychologists, nutritional professionals, and even nurse midwives.

CMS is projecting more than 75,000 new enrollees, and another 225,000 existing clinicians that will meet the low-volume providers’ criteria.  Therefore, it is forecasted that under MIPS in 2017 to be approximately 750,000 Clinicians reporting performance measures. A low-volume provider or a clinician is defined as having Medicare-billed charges of $30,000 or less and provides Part B services to 100 or fewer Medicare patients during 2017. 

How does the performance categories & scoring work?

Once reporting is completed under the four MIPS performance categories, they are recalculated into a composite performance score (CPS) to determine the MPFS adjustments.  Each category is scored independently with a percentage of maximum possible performance. The scores are weighted, then consolidated to produce the CPS. The categories distribution is:

  • Quality – 60%
  • Advancing Care Information (ACI) – 25%
  • Clinical Practice Improvement Activities (CPIA) – 15%
  • Cost/Resource Use – 0% shifting to higher percentage in future years

The ratio proportion of Quality and Resource Use will gradually change over the years, with Quality reducing proportionally to make adjustments for Resource Use weightage increases to 10% in 2018. There will be no changes to ACI and CPIA quota.

Clinicians under MIPS can choose to be scored as individuals or as part of a group of clinicians based on tax ID.  The invidivual vs. group reporting option applied to all performance categories and is a key determinant in the final Componsite Performance Score. One consideration is those clinicians also participating in alternative payment models, such as Medicare ACOs, must be rated as a group and do not generally have the choice to be rated as individuals. 

What are the financial implications of the change?

The financial impact can be both negative and positive based on your performance starting off at 4% in 2019 and go up to 9% in 2022. Negative adjustments are capped off each year, but clinicians can earn positive adjustments up to three times the amount of a negative adjustment. This is CMS’s attempt to encourage clinicians to improve their performance each year as well as rewarding extra performance with bonuses, without penalizing clinicians that don’t perform above 25% of the national benchmark. 

CMS is scheduled to provide their first and only feedback for 2017 in July to enable clinicians a snapshot of how they are performing.  With the expectation that as MIPS matures they would move to quarterly feedback.

Under MACRA final rules, a single data submission method is proposed for performance categories of MIPS, to allow existing data submission methods in place for PQRS, i.e. EHR and QCDR, to enable alignment with Quality, ACI and CPIA. In regards to cost/resource use, that will be scored based on claim submissions.

As part of the final MACRA rule for transition year 2017, clinicians have options on their reporting frequency and approach around

  • Data Submission Requirements
  • Minimum reporting to avoid penalties
  • 90-day reporting for positive adjustment
  • Report the full year to maximize incentives

The last date for data submission of all reporting methods across all MIPS performance categories will be March 31st of the calendar year following the performance year; for example for 2017 it will be March 31, 2018.

How can I prepare?

  1. Understand your practice’s current compliance. MIPS will be an ever bigger challenge for clinicians that performed below par.
  2. Focus on ensuring your medical coding and documentation is in order as the resource use category is based on claims data. Ensuring accurate claims and patient risk is captured.
  3. Educate and train your staff about what is coming and what to expect for practices workflow and patient engagement.