MACRA Offers Two Routes to Qualify for Quality-Based Payments

MIPS Payment System

Around November 1, 2017, the Centers for Medicare & Medicaid Services (CMS) is expected to release its final rule implementing the Medicare Access and CHIP Reauthorization Act (MACRA) and its quality-based measures for paying providers. In June, the agency released a proposed rule that would make 2018 another transition year for practices that are having a difficult time adapting to the new Medicare payment system.

As providers ready for the final rule, this series of posts on MACRA and its Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs) will explore the background of the framework and explain what you can expect if you take the MIPS or the APM route. (Spoiler alert: You still have to deal with MIPS!)


First passed in 2015, MACRA was a major game-changer for physician practices, shi­fting the focus of the payment model for treating Medicare beneficiaries from the quantity of services provided to the quality of care. That proved easier said than done, of course, and from CMS’s “final rule with comment period” in October 2016 for the 2017 MIPS performance year to the proposed rule it actually offered in June 2017, providers are following along – or trying to – as the rules of the game continue to evolve.

MACRA moves the focus from the number of services provided to the outcomes or value of those services. Services provided in 2017 will form the basis for payments in 2019. While the rules for an easy “transition year” for MIPS for 2017 was good news overall for physicians, it still made clear that providers who don’t start participating in 2017 will see cuts in 2019 – and that’s right around the corner.

Depending on activities your practice took throughout 2017, you could see a reduction of up to 4 percent in your Medicare revenue. The reporting period began October 2 for a 90-day reporting period that will be used to calculate payments in 2019.

The Basic MACRA Framework

The new Quality Payment Program (QPP) that MACRA established ends the Sustainable Growth Rate formula and replaces it with two tracks that are actually inter-related.

The Merit-based Incentive Payment System (MIPS)

MIPS replaces the old PQRS program, Value-Based Payment Modifier (VM) program, and Medicare EHR Incentive Program for EPs (Meaningful Use). MIPS is mandatory, unless you qualify for a very limited number of exclusions. CMS expected that most providers would actively participate in MIPS for the 2017 Reporting Period by reporting on at least one performance category (Quality, Improvement Activities or Advancing Care Information (ACI), which is the successor to Meaningful Use).

Advanced Alternative Payment Models (APMs)

Participating in an APM will help you to meet the MIPS requirements. The most common examples of APMs are the various CMS ACO (Accountable Care Organization) programs such as the Shared Savings Program or Next-Generation ACO Model Program. If you are already an active participant in one of these ACOs, a significant part of your MIPS reporting requirements will be fulfilled by your ACO.

What’s At Stake in MIPS

CMS predicted that the great majority of solo practitioners and small group practices would receive negative payment adjustments under MIPS. MACRA requires the payment adjustments to be budget-neutral, and CMS estimated that the great majority of large health care delivery organizations with at least 100 providers would receive a positive payment adjustment. This seemed to leave small practices at a disadvantage.

Those MIPS payment adjustments increase over the next four years from 2017 to 2020—from +/- 4 percent to +/- 9 percent—and your performance each year determines your payment adjustments two years down the road. If most small practices will receive a negative payment adjustment under MIPS, they will soon enough be seeing up to a 9-percent decrease in their Medicare reimbursements.

Taking the APM Route

Participating with an ACO or other APM Entity is an alternative approach to MIPS. The APM refers to another CMS program such as the Shared Savings Program or the Next-Generation ACO Model Program. The APM Entity refers to the ACO or other entity participating in that particular CMS program; your practice in turn participates with the APM Entity. CMS will annually approve APMs as “MIPS APMs” and/or “Advanced APMs,” based on satisfying the following criteria:

  • The APM must require quality reporting “equivalent to” MIPS quality reporting requirements;
  • The APM must require the participants to use CEHRT; and
  • The APM must transfer a minimum level of financial risk from the payer to the participants.


The requirements for a MIPS APM are lower than for an Advanced APM. For an APM to qualify as an Advanced APM, it must provide a dual-sided financial risk to the participants. For example, Shared Savings Program Track 1 (which only provides an upside financial impact, in case cost of care is lower than expected) only qualifies as a MIPS APM. But SSP Tracks 2 and 3 (which provides dual-sided risk, where the participants will be held responsible for part of higher-than-expected cost of care) qualify as both a MIPS APM and as an Advanced APM. Currently, there are far more MIPS APM Entities than Advanced APM Entities!

MIPS APMs vs. Advanced APMs

MIPS APMs get preferential MIPS performance scoring, with your quality performance score based on the ACO’s group submission. Resource use is not scored in 2017, but it will be in the future. You get an automatic credit for 50 percent of your Improvement Activities performance score (in 2017 this is actually 100 percent). And Individual Improvement Activities and ACI performance scores are aggregated into the ACO group score, with all ACO participants receiving the same score.

Advanced APMs, however, may allow you to entirely avoid a MIPS payment adjustment and earn an Advanced APM incentive payment instead. If the Advanced APM Entity qualifies by reaching a threshold volume of attributed patients or payment amounts, it receives a 5-percent incentive payment and is not subject to MIPS payment adjustments.

Otherwise, if the Advanced APM Entity partially qualifies by reaching a lower threshold of attributed patients or payment amounts, it receives no incentive payment and may optionally be excluded from MIPS payment adjustments. Thus, it avoids a negative adjustment, as the APM Entity will take the MIPS payment adjustment if it would be positive, and rejects it if it would be negative.

Advanced APM Entities that don’t even partially qualify will be processed as MIPS APMs and still be eligible for MIPS preferential scoring. However, they will necessarily receive a MIPS payment adjustment, whether that be positive, neutral or negative – they will not have a choice in the matter.

Bottom Line: You’re Still in MIPS

All APM participants are required to report MIPS performance. Qualification is determined aft­er the end of the performance period. As a Qualifying Provider in an APM, your practice will be eligible for a 5-percent bonus in the years 2019 through 2024 instead of the MIPS payment adjustments. So whether you choose MIPS or an APM, you’re dealing with MIPS.

Next week, we’ll explore some of the ins and outs of the June 2017 proposed rule and find out more what CMS may be up to for 2018.

  • To read more about MACRA and MIPS implementation this year, click here to download our full free report, “2017 MACRA / MIPS Survival Guide.”
  • Thanks to Mike Schmidt of Eye Care Leaders and Jeanne Chamberlin of MSOC Health for their expertise in creating the content for our report and this series.

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