MACRA Final Rule: Pros and Cons of MIPS and APM

Since its release in October 2016, Healthcare providers have been analyzing how the Medicare Access and CHIP Reauthorization Act (MACRA) Final Rule will impact their healthcare organization. MACRA is an incentive program for Eligible Professionals (EPs), and the final rule consolidates three existing programs: the Medicare Electronic Health Record (EHR), the Physician Value-based Payment Modifier (VM), and the Physician Quality Reporting System (PQRS).

The Centers for Medicare and Medicaid Services (CMS) has referred 2017 as a transition year, and has allowed eligible professionals to engage in MACRA at their pace and at a level which they feel comfortable. Under the rule, CMS has provided many alternatives to avoid negative payment adjustments and to earn positive payment adjustments in 2017. EPs will not be subjected to negative payment adjustments for their performance in the year 2017 unless they fail to engage in one of the options, that is, Merit-Based Incentive Payment System (MIPS) or Advanced Alternative Payment Model (APM).

Analyzing MIPS and APMs

Merit-Based Incentive Payment System (MIPS)

The key components on which MIPS will score EPs are: quality, advancing care information, resource use, and clinical performance improvement activities. In 2017, payment will be based on performance reporting and will be adjusted at up to 4% in 2019 and up to 9% in 2022. EPs can engage in MIPS with one of the following options:

  • Full Participation

This option is available for the year 2017. EPs can choose to report for a full 90-day period, or, for a full year, which will qualify them for up to 4% positive payment adjustment and an additional performance bonus based on their performance in 2017.

Pros Cons
You can get up to a 4% positive payment adjustment. For some cases, you can even get a much larger performance payment adjustment. There might be a less than optimal MIPS final score published on the CMS Physician Compare website.
Even minimal MIPS participation in 2017 will help to avoid any negative payment adjustments. Additional resources might be needed to establish workflows, analyze data, and educate staff about attaining high measure reporting levels.


  • Partial Participation

EPs engaging in MIPS for less than a full year but for the complete 90-day period— either simultaneously or at different times—might avoid a negative payment adjustment and will be eligible to receive a positive payment adjustment.

Pros Cons
There will be more time to prepare for MIPS. You can also prepare for 2018, when reporting under MIPS might require a full year of data. You will not be able to achieve higher payment adjustment levels.


  • Minimal Participation

EPs can avoid negative payment adjustments if they:

  • Submit data on one quality measure;
  • Report the required measures of advancing care information performance category; or
  • Report one activity in the improvement activities performance category.

Choosing one of these options is relatively easy for practices that were engaging in PQRS in prior years.

Pros Cons
You can avoid negative payment adjustments associated with poor performance or non-participation in 2017. This option eliminates any potential positive payment adjustment associated with the performance year 2017.
Composite Performance Score will not be published as CMS will not have a complete data set. The minimum effort required might not position the practice well for MIPS reporting in 2018.


Advanced Alternative Payment Model (APM)

A majority of EPs will initially fall under the MIPS pathway, but CMS has been encouraging EPs to join Advanced Alternative Payment Models (APMs), which will reward EPs with a 5% incentive payment if they become a Qualifying APM Participant (QP) by meeting the criteria for an Advanced APM. The criteria that an APM must meet are as follows:

  • For APM, participants are required to use certified EHR technology (CEHRT).
  • APM should provide for payments for covered professional services that are based on quality measures comparable to the ones in the quality performance category under MIPS.
  • Either the APM entities under APM should bear financial risk for monetary loss under APM that are in excess of a nominal amount; or an APM should either be a Medical Home Model that is expanded under section 1115A(c) of the Act.
Pros Cons
You get eligible for 5% bonus payment based on prior Medicare payments. Under Advanced APM, minimum payment is 25% of Medicare Part B payments and minimum volume thresholds is 20% patient volume
Medicare will not calculate a Composite Performance Score for providers for QPs; thus, there will not be any public reporting of MIPS Performance Score on the CMS Physician Compare website.  There will be a limited availability of Advanced APMs in the performance year 2017.
EPs who engage with an Advanced APM but do not meet the minimum volume thresholds or payments, can participate in MIPS during that performance year. The potential for revenue lost through the shared-risk programs.

The impact of MACRA will be unique to each provider. But, the first step is to understand the rule and how it might affect you. For more insights on the proposed rules for MACRA and how it will impact your Medicare payments in 2017, attend this Webinar by expert speaker Jeanne J. Chamberlin, who is currently a Practice Management Consultant with MSOC Health. You will also get to understand the impact of MACRA and analyze the pros and cons of APM and MIPS.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!