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MACRA Implementation and Its Implications for Providers

October 10, 2016 // Emiliano Urbina

The Department of Health and Human Services (HHS) recently passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which is set to start on January 1, 2017. MACRA will affect Medicare Part B reimbursements beginning in 2019. The new law aims to consolidate and simplify a patchwork of programs in the Medicare space under a unified framework called the Quality Payment Program. It will include the Physician Quality Reporting System (PQRS), Meaningful Use (MU), the Value Base Payment Modifier (VBPM) and the Sustainable Growth Formula.

The proposed framework provides Eligible Clinicians (ECs) with two paths to comply with the new law: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). CMS expects that the majority of ECs will choose to participate in MIPS over Advanced APMs in the initial years of the program. Over the long run, however, this framework aims to motivate most ECs to consider participating in Advanced APMs.

Merit-based Incentive Payment System (MIPS)

Clinicians choosing to take part in the Quality Payment Program under MIPS must report their performance on four categories: Quality, Resource Use, Advancing Care Information, and Clinical Practices Improvement Activities.

Quality (50% of composite score)

  • Replaces the Physician Quality Reporting System (PQRS) and the quality component of the Value Modifier Program
  • Requires reporting on six measures, versus the nine measures currently required under the Physician Quality Reporting System (measures must include one crosscutting measure and one outcome measure—if available—or another high-quality measure)
  • Offers more than 200 measures to pick from, which will allow clinicians to accommodate differences in specialty and practices

Resource Use (10% of composite score)

  • Replaces the cost component of the Value Modifier Program
  • Requires using Medicare claims data to evaluate the total per capita cost measure, the Medicare Spending per Beneficiary (MSPB) measure, and several episode-based measures to assess the amount of services MIPS-eligible clinicians provide during a full performance period(1)

Advancing Care Information (25% of composite score)

  • Replaces the EHR Incentive Program for physicians, also known as the Meaningful Use (MU) Program
  • Requires reporting on customizable measures that reflect EHR technology is being used within the practice, with particular emphasis on interoperability and information exchange (2)
  • Necessitates MIPS-eligible clinicians achieving a total score of over 100 (out of 131 possible points) to receive the full 25% for this category

Clinical Practice Improvement Activities (15% of composite score)

  • Involves clinician assessment based on their participation in activities that improve capabilities centered around care coordination, beneficiary engagement and patient safety
  • Provides full credit for clinicians participating in Alternative Payment Model (APM) and Patient-centered Medical Homes
  • Offers a maximum total score of 60 points for this category—highly weighted activities are worth 20 points, while other activities are worth 10 points

CMS will score clinicians based on these performance categories to determine a negative, neutral and positive payment adjustment while keeping the MIPS budget neutral.

In 2019, the payment adjustment will be four (4) percent based on the 2017 performance period. The payment adjustment will increase to five (5) percent in 2020, seven (7) percent in 2021, and nine (9) percent in 2022 and beyond. Additionally, the first five years of the program CMS will offer additional performance bonuses from a pool of $500 million for clinicians with exceptional performance. This performance bonus must not exceed 10 percent on top of the positive payment adjustment that for that year.

Advanced Alternative Payment Models (APM)

Advanced APMs are risk-based payment arrangements between payers and provider. MACRA does not change how any particular APM rewards value, but instead aims to create additional incentives for participation in these delivery models.

From 2019 through 2024, clinicians who meet the requirements for participating in Advanced APMs will be excluded from MIPS requirements and will receive a five (5) percent Medicare Part B incentive payment. Beyond 2026, these clinicians will receive a higher fee schedule update compared to those clinicians that only participated in MIPS. For the first year, clinician can choose to take part in the following APMs:

  • Comprehensive End-Stage Renal Disease Care Model
  • Comprehensive Primary Care Plus
  • Medicare Shared Savings Track 2
  • Medicare Shared Savings Track 3
  • Next Generation ACO Model
  • Oncology Care Model Two-Sided Risk Arrangements

CMS will annually review and update the list of eligible APMs that qualify under the Qualified Payment Program. For clinicians to receive the incentive payments, they must meet the threshold of payments which qualify under these APMs as shown in the table below.

Payment Year 2019 2020 2021 2022 2023 2024 and later
Percentage of Payments through an Advanced APM 25% 25% 50% 50% 75% 75%
Percentage of Patients through an Advanced APM 20% 20% 35% 35% 50% 50%

Source: CMS

For the first year of the program, all Eligible Clinicians will have to report their performance through MIPS. Those clinicians that cannot meet the Advanced APM participation threshold will be eligible to receive payment incentives through MIPS and will be rewarded for participating to some extent in Advanced APMs. This intermediary measure will allow clinicians to switch between components of the Quality Payment Program more easily.

Update to MACRA (09/08/2016)

On September 8, 2016, CMS announced that it will allow ECs to choose the level and pace of which they will have to comply with MACRA requirements. During the first performance period, which is set to start on January 1, 2017, clinicians will be given four options to meet the requirements of the Quality Payment Program:

  1. Report on any data to avoid a negative payment adjustment.
  2. Submit data for a reduced number of days. Therefore, the first performance period could begin later than January 1, 2017, and allow clinicians to qualify for positive payment adjustments in 2019.
  3. Be ready to comply with MACRA on January 1, 2017.
  4. Be ready to participate in Advanced APMs on January 1, 2017.

The aim of these changes is to make the consequences of not being ready for MACRA more modest as the program starts up. But many providers and policy makers are concerned about the possible conflicts that may arise as a result of this announcement. CMS has committed to address these concerns within the final ruling of MACRA, which is set to release at the end of October.



1. “What Is MACRA and What It Means to Providers, EHR Technology.” EHR Intelligence. Web. 20 Sep. 2016.

2. “How does the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) reform Medicare payment?” CMS.

3. “BREAKING: CMS will give providers flexibility on MACRA requirements”, Modern Healthcare. Web. 8 Sep. 2016.