Final MACRA Rule Offers Flexibility

Published On: October 20, 2016

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The Centers for Medicare and Medicaid Services (CMS) released the final rule for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) on October 14, 2016, one of the most significant reforms from CMS.  The final rule provides Medicare incentives to reward quality and value—not volume—through the use of alternative payment models such as accountable care organizations (ACOs).  The final rule significantly softens certain requirements from the proposed rule, with CMS emphasizing that physicians will be allowed to “pick their pace” for satisfying MACRA requirements that begin on January 1, 2017.

Starting in 2019, CMS will replace a number of existing reporting programs with a two track system, known as the Quality Payment Program, under which eligible clinicians will receive incentive reimbursement payments through either:

  • The Merit-Based Incentive Payment Systems (MIPS); or
  • Alternative payment models (APMs).

Merit-Based Incentive Payment Systems (MIPS)

MIPS consolidates three existing Medicare programs: (1) the Physician Quality Reporting System (PQRS), (2) the Physician Value-based Payment Modifier, and the (3) Medicare Electronic Health Record (EHR) Incentive Program. Under MIPS, eligible clinicians can receive incentive payment or penalty based on four categories of measures: quality, cost, improvement activities, and the use of EHRs. CMS will take the results from these four categories and create a composite score that it will then use to increase or decrease the clinician’s reimbursement under the Medicare Physician Fee Schedule (PFS). These adjustments will begin on January 1, 2019, and will be based on data collected in 2017.  Clinicians scoring below a certain threshold will incur a negative adjustment in their payments starting with a maximum penalty of 4% in 2019 and increasing to a maximum penalty of 9% in 2022 and beyond. Those scoring above the threshold can receive up to a 4% increase in 2019, with a maximum increase of 9% in 2022 and beyond. High achievers will be eligible for an additional upward adjustment.

Alternative Payment Models (APMs)

The second track is for clinicians participating in an “Advanced APM,” including certain accountable care organizations (ACOs) and patient-centered medical homes. Advanced APMs essentially operate as more generous incentive programs that are exempt from the MIPS requirements.  Those on the Advanced APM track can earn bonuses of up to 5% of their PFS payments in 2019. However, only ACOs accepting some amount of downside financial risk can qualify for the MIPS exemption.

For more information about the MACRA Ruling including; webinars, fact sheet and additional resources visit:

Additional Links:

AMA Payment Model Evaluator

AMA STEPS Forward™

Becker’s 10 things to know about MACRA Rule: