July 6, 2016 | Sarah Matousek

What is MACRA Part 2: Digging into the Quality Payment Programs


Last week, we offered a high-level overview of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).  This week, we will explore the two Quality Payment Programs (QPPs) contained in the law, as they will affect the majority of US providers caring for Medicare patients.  Providers should act now to plan for the 2017 performance reporting year by educating themselves and their executive teams about the new rules and how they differ from current value reporting programs.

By way of review, MACRA is a bipartisan legislation that aims to link Medicare fee for service payments to quality and value.  To accomplish this, MACRA does the following:

Macra Overview for Part2 Blog

Today’s post will focus on the two Quality Payment Programs (QPPs), which coincide with numbers 3 and 4 above:

  • The Merit-Based Incentive Payment System (MIPS) track and
  • The Advanced Alternative Payment Model (APM) track

Each track rewards clinicians that provide high quality, efficient care to Medicare fee for service patients.  Below are two graphics.  The first is an overview of the differences between the two tracks at a high level and the second is a flow chart describing how a clinician will know which track to plan for.  We will then offer more detailed descriptions of how each track works and the eligibility requirements for each.

MIPS vs. Advanced APM Overview (Click to enlarge):


WHICH PATHWAY WILL I TAKE? (Click to enlarge)

APM Flowchart v2 07062016



The MIPS track combines the Physician Quality Reporting System (PQRS), Meaningful Use (MU), and the Value-based Modifier (VM) programs together beginning in January of 2019.  Similar to the current programs, MIPS will offer payment adjustments based on performance on quality measures.  Payment adjustments are based on performance two years prior, so performance measurement that begins in January of 2017 will see payment in 2019.  The four measurement categories used to assess clinician performance are shown in the figure below.

Exploded Pie Chart-How will MIPS be scored

Many of the measures included in the categories above are similar or identical to those in the PQRS, MU, and VM programs that MIPS is replacing.  Combined, the measures will yield a total composite performance score (CPS) of up to 100 points.  Providers who score above an annually-set threshold will receive a payment incentive (+4% for CY2019) while providers who score below the threshold will be penalized the same amount, making the program effectively budget neutral, where the penalties pay for the incentives.

Importantly, positive incentive payments can increase by up to a factor of three if the number of clinicians penalized is far greater than those receiving incentives, meaning that incentive earners could earn up to +12% for the CY2017 performance year.    A 10% “exceptional performance bonus” is also available to the top performers, making the maximum possible incentive +22%.  Incentive payments and penalties increase over time until they reach ±9% (+37% max) in CY2022.



MIPS Eligibility: Not Just Physicians

MACRA’s QPP eligibility is limited to individuals or groups that receive Medicare Part B (all called the Physician Fee Schedule) or Critical Access Hospital Method II payments.  For the CY2017 and CY2018 performance reporting years, the list of eligible clinicians includes:

  • Physicians
  • Physician Assistants
  • Nurse Practitioners
  • Clinical Nurse Specialists
  • Certified Registered Nurse Anesthetists
  • Groups of Such Professionals (who bill under a common tax ID)

Who is not included?  Individuals in their first year of enrollment in Medicare, those who do not meet patient or service volume thresholds, and most qualified participants (QPs) in the advanced APM track.  In CY2019, eligibility will expand to include many additional classes of professionals, including (but not limited to) clinical psychologists, physical therapists, nurse midwives, nutritionists, and speech therapists.  According to CMS, most eligible professionals that currently receive Medicare fee for service payments will be enrolled in the MIPS track by 2020.



The advanced APM track is fairly straight forward.  Qualifying participants (eligibility described below) will receive an annual bonus incentive payment of 5% for years 2019-2024.  In years 2026 and beyond, clinicians in this track will be eligible for a higher fee schedule update (+0.75% vs. +0.25%) compared to MIPS participants.  Not all APM participants will make it into the advanced APM qualified participants group.  However, those that do will receive the 5% bonus payments and be excluded from MIPS (with some exceptions).

Advanced APM Eligibility: Not Just Any APM

Although APMs exist through multiple payers, MACRA’s definition is limited to the following Medicare-specific models:

  • CMS Innovation Center Model (other than a Health Care innovation Award)
  • Medicare Shared Savings Program (MSSP ACOs)
  • Demonstration under the Health Care Quality Demonstration Program
  • Demonstration required by federal law

APM Circle Visual

Importantly, not all Medicare APM participants will qualify for the 5% lump sum annual bonus payment included in this track.  Those APM participants who do not meet the additional requirements for the advanced APM track will be subject to MIPS, but will have the added benefit of more favorable scoring in the Clinical Practice Improvement performance category.  The subset of APM participants that wish to be a qualifying participant in the advanced APM program must meet the following additional requirements:

  • Use of certified EHR technology
  • Payment is based on quality measured comparable to those in the MIPS Quality performance category
  • Bear more than “nominal financial risk” or the APM is a Medical Home Model expanded by the CMS Innovation Center

Some examples of CMS APMs that also qualify as advanced APMs include:

  • Medicare Shared Savings Program Tracks 2 & 3
  • Next Generation ACOs
  • Oncology Care Model (OCM) with 2-sided risk
  • Comprehensive End-Stage Renal Disease (ESRD) Care Model, Large Dialysis Organization (LDO)
  • Comprehensive Primary Care Plus (CPC+) Model

For clinicians who expect to participate in one of these two pathways, the time to begin planning for the first performance measurement year is now.  Remember that 2017 reporting affects 2019 payments.  The final rule (and list of measures) is expected in November.  For more information about MACRA and a link to the CMS Quality Measure Development Plan, click here.