The Medicare and CHIP Reauthorization Act (MACRA)

Acronym Guide

MACRA: Medicare and CHIP Reauthorization Act

MIPS: Merit-based Incentive Payment System

APM: Alternative Payment Model

QPP: Quality Payment Program

PQRS: Physician Quality Reporting System

MU: Meaningful Use/EHR Incentive Program

VM: Value-based Payment Modifier Program


On October 14, the CMS released the final rule implementing MACRA, a significant change in how Medicare reimburses physicians. The goal of this legislation is to incentivize high-quality, patient-centered care.

Under MACRA, physicians may participate in one of two tracks: Merit-based Incentive Payment System (MIPS) or Advanced Alternative Payment Models (Advanced APMs). Based on CMS calculations an average of 92% of eligible clinicians will fall into the MIPS track, while the remaining 8% will fall into the APM track.

Track 1: Merit-Based Incentive Payment Systems (MIPS)

Beginning January 1, 2017, an estimated 836,000 Medicare clinicians who bill more than $30,000 a year or provide care for at least 100 patients under traditional, fee-for-service Medicare will be subject to MIPS.

MIPS combines existing pay-for-performance programs: PQRS, VM, and MU. Payments will be adjusted based on evidence-based and group or individual physician quality data.

MIPS Reporting

In 2017, physicians can choose when they start reporting anytime between January 1, and October 2, 2017, but they must submit performance data by March 31, 2018, in order to be considered a participant for the 2019 payment year.

Physicians have four MIPS options for reporting during this transition period:

  • Not Participating in Quality Payment Program: Physicians that do not submit any 2017 data would receive a negative 4% payment adjustment.
  • Test: Physicians who submit a minimum amount of 2017 data (e.g., one quality measure or one improvement activity) will avoid a downward payment adjustment.
  • Partial: Physicians who submit 90 days of 2017 data may earn a neutral or small positive payment adjustment.
  • Full: Physicians who submit a full year of 2017 data may earn a moderate positive payment adjustment.

MIPS Scoring

The Composite Performance Score is based on four factors; each has a different weight. Please note that these weights will change after the 2017 transition period.

  1. Quality: Clinicians must report on six quality measures; one must be an outcome measure.
  2. Clinical Practice Improvement Activities: For 2017, clinicians may attest to having completed up to four medium-weighted or two high-weighted clinical practice improvement activities. PCMH status and participation in certain APMs satisfies this requirement.
  3. Advancing Care Information (MU): Clinicians must report on five EHR use-related measures.
  4. Resource Use (Cost): This category will not be included in 2017 performance score. It will increase to 10% for performance period year two.

2017 Performance Pie Chart: 60% Quality; 25% Advancing Care Information Performance; 15% Clinical Improvement Activities; 0% Cost/Resource Use

Entities will be assigned a performance score of 0-100, which will be compared to the performance threshold. The 2017 performance threshold will be three out of a possible 100 points. Clinician entities that score higher than three will receive bonuses, whereas clinicians that fall below three will face penalties.

After the first performance period, the range potential payment adjustments based on performance against MIPS measures grows each year through 2022. Additionally, physicians who perform exceptionally well (score >70) are eligible to share in an additional pool of bonus funds.

Payment Adjustment graph: 2019: +/- 4%; 2020: +/- 5%;  2021: +/- 7%;  2022: +/- 9%;

Track 2: Alternative Payment Models

APMs are payment approaches, developed in partnership with the clinician community, that provide added incentives to deliver high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population.

Advanced APMs are a subset of APMs that let practices earn more for taking on some risk related to their patients' outcomes. Participants can earn a 5% annual incentive payment and will be exempt from the MIPS requirements.

In 2017, Advanced APMs will include:

  • Comprehensive ESRD Care (CEC) - Two-Sided Risk
  • Comprehensive Primary Care Plus (CPC+)
  • Next Generation ACO Model
  • Shared Savings Program - Track 2
  • Shared Savings Program - Track 3
  • Oncology Care Model (OCM) - Two-Sided Risk

If you are in an Advanced APM, you'll earn the 5% incentive payment in 2019 if:

  • you receive 25% of your Medicare Part B payments through an Advanced APM or
  • see 20% of your Medicare patients through an Advanced APM
  • Next Gen model now open

In 2018, new models will be developed.

GNYHA Ventures and our national affiliate Premier can help guide you to MACRA success. Contact us for more information.

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