Overview of MACRA, MIPS, and APMs

The first measurement period for the Medicare Quality Payment Program under MACRA began January 1, 2017. Below you can find an outline of the basics of the program to help you prepare. Able Health will update this summary continuously as new information becomes available.

Medicare Quality Payment Program

Recent MACRA legislation introduced a new Medicare value-based reimbursement system that will impact Medicare reimbursement amounts beginning in 2019. This new system, called the Quality Payment Program (QPP), repeals the Sustainable Growth Rate Formula and is made up of two participation tracks—the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). If you are a clinician that bills services under the Medicare Physician Fee Schedule, understanding the requirements and payment changes under MACRA is very important since payment adjustments that occur in 2019 will be based on action and performance starting January 1, 2017.

The following tabs outline what you need to know for participation in MIPS and APMs under MACRA:

Overview of the Merit-Based Incentive Payment System (MIPS)

The Merit-Based Incentive Payment System (MIPS) is a Medicare value-based payment system that combines three current Medicare programs that are scheduled to sunset at the end of 2016. The new system will evaluate the performance of all MIPS eligible clinicians or eligible groups across four performance categories in order to determine payment adjustments that will be applied in future years: Quality, Cost, Advancing Care Information, and Improvement Activities.

The first MIPS performance year is January 1, 2017 - December 31, 2017, and payment adjustments accrued from that performance year will be applied to Medicare Part B reimbursements beginning on January 1, 2019. In response to feedback from stakeholders and healthcare providers, CMS has designated the 2017 performance year a transition year, with reduced requirements that encourage broad successful participation by MIPS eligible clinicians.

Does your medical group understand the requirements necessary to avoid a negative MIPS payment adjustment in the transition year and beyond? Are you prepared to begin reporting for MIPS in 2017? Keep scrolling to find out how Able Health can help make your transition to MIPS participation seamless and successful.

MIPS Performance Categories

Contribution to MIPS Performance Score

Quality

60% of MIPS Composite Score in 2017

  • This MIPS performance category replaces the requirements currently included under the PQRS.
  • For full participation, and to maximize the possibility of earning a positive payment adjustment in 2017, patient-facing MIPS eligible clinicians must report a set of six measures that includes at least one outcome measure or, if no applicable outcome measure is available, one high-priority measure (appropriate use, patient safety, efficiency, patient experience, and care coordination measures). Performance must be reported for a period that is at least a continuous 90-days and up to, ideally, a full calendar year.
  • For partial or minimum participation in this performance category, eligible clinicians can report one or more quality measures for at least a full 90-day period. Payment adjustments are determined based on level of partial participation.
  • Eligible clinicians and groups can elect to report individual measures or a specialty measure set, which may contain fewer than six measures. If a specialty measure set contains fewer than six measures, MIPS eligible clinicians will be required to report all available measures within the set. If the measure set contains six or more measures, MIPS eligible clinicians can choose six or more measures to report within the set, including one outcome measure or, if no applicable outcome measure is available, one high-priority measure.
  • Points for the Quality performance category will be assigned based on the performance level results of each measure that is submitted to CMS.
  • The Quality performance category weight will decrease to 50% of the MIPS composite score in the 2018 performance year and 30% of the MIPS composite score in the 2019 performance year and beyond.
Cost (Resource Use)

0% of MIPS Composite Score in 2017

  • Based on feedback from healthcare providers regarding the Cost category, CMS adjusted its original proposal and this performance category will be weighted at 0% in 2017 to allow participants more time to familiarize themselves with the cost measures in the context of MIPS.
  • During the 2017 transition year, CMS will calculate a performance score for providers for whom they have reliable data, using up to 12 measures based on applicability.
  • This score will be reported to clinicians but will not impact the MIPS composite score used to determine the 2019 payment adjustment.
  • CMS will calculate these measures based on submitted Medicare Part B claims, so there are no reporting requirements.
  • In the future, this MIPS performance category will assess eligible clinicians on a broader set of resource use measures.
  • The Cost performance category weight will increase to 10% of the composite score in the 2018 performance year and 30% of the final score in the 2019 performance year.
Improvement Activities

15% of MIPS Composite Score in 2017

  • This MIPS performance category requires that MIPS eligible clinicians select and complete improvement activities from a list of activities that CMS believes will positively impact patient outcomes.
  • Eligible clinicians must attest to completing four medium-weighted or two high-weighted activities. These requirements have been reduced from the originally proposed six medium-weighted or three high-weighted activities.
  • Individuals and groups participating in certain patient-centered medical homes can receive full credit for this category, and Alternative Payment Model (APM) participants are eligible receive at least 50% credit.
Advancing Care Information

25% of MIPS Composite Score in 2017

  • This MIPS performance category will replace the Medicare EHR Incentive Program for Eligible Professionals (Meaningful Use) and will offer more flexibility than what was previously available under Stage 1 and Stage 2 of Meaningful Use.
  • The overall Advancing Care Information (ACI) performance score will comprise a base score (based on attesting “yes” or “no” to a set of measures) and a performance score (based on measure performance rates), with an optional bonus. All measures for the base score must be reported in order to earn any score in the category.
  • The number of measures required to achieve the base score has been reduced from 11 to five. All other ACI measures will be optional for reporting, and reporting on additional measures will allow a clinician to earn a higher score.
MIPS Transition Year

In 2017, providers can pick the pace of participation in the Quality Payment Program that fits them best, including three options for participating in the MIPS program.

Participation Option Payment Adjustment Impact
(1) Full MIPS Participation. Report all measures required under the MIPS program, in all performance categories that require reporting, for a full 90-day period or, ideally, the full calendar year. Eligible for maximum positive adjustment. Clinicians who meet these requirements are maximizing their chance to qualify for a positive adjustment. Exceptional performers who achieve a MIPS Composite Performance Score of at least 70 out of 100 will be eligible for an additional positive adjustment from a bonus pool of $500 million.
(2) Partial MIPS Participation. Report more than one measure in the Quality category, more than one activity in the Improvement Activities category, or more than one of the required measures in the Advancing Care Information category for at least a full 90-day period. Avoid a negative payment adjustment and be eligible for a positive payment adjustment. Clinicians who meet these requirements will avoid a negative payment adjustment and potentially earn a positive payment adjustment in 2019.
(3) Minimum MIPS Participation. Report one measure in the Quality performance category, report one activity in the Improvement Activities performance category, or report the required measures in the Advancing Care Information performance category. Avoid a negative payment adjustment only. Clinicians who meet these requirements will meet the 2017 MIPS performance threshold (3 points) and avoid a negative 4% payment adjustment in 2019. With this level of participation, there will be no opportunity to earn additional incentive payments.
(4) Participate in an Advanced APM. Participate in an Advanced APM in 2017 and meet the minimum Qualifying Participant payment or patient requirements. Potentially earn the Advanced APM positive payment incentive. MIPS eligible clinicians participating in one or more Advanced APMs who receive a sufficient portion of their Medicare payments or see a sufficient portion of their Medicare patients through the Advanced APM(s) will qualify for a 5% bonus incentive payment in 2019.

Overview of Alternative Payment Models (APMs)

Alternative Payment Models (APMs) offer new ways for CMS to pay health care providers for the care they give Medicare beneficiaries. Clinicians who take a further step towards care transformation by participating to a sufficient extent in an Advanced APM are exempt from MIPS payment adjustments and can qualify for a 5% Medicare Part B incentive payment each year.

Definition of Alternative Payment Models (APMs)

The base definition of an Alternative Payment Model (APM) includes:

  • CMS Innovation Center models (under section 1115A, other than a Health Care Innovation Award)
  • The Medicare Shared Savings Program
  • Demonstrations under the Health Care Quality Demonstration Program
  • Demonstrations required by federal law
What qualifies as an Advanced APM?

Advanced APMs are those that meet the base definition of an APM under MACRA and also meet the following criteria:

  • The APM requires participants to use certified EHR technology.
  • The APM bases payment on quality measures comparable to those in the MIPS Quality performance category.
  • The APM either:
    • Requires APM Entities to bear more than nominal financial risk for monetary losses; or
    • Is a Medical Home Model expanded under the authority of the Centers for Medicare and Medicaid Innovation (section 1115A(c) of the Act).

Because many APMs offer different tracks or options within the same model, CMS has finalized the proposal to consider different tracks or options within an APM separately for the purposes of determining whether the track or option meets the Advanced APM criteria. CMS will release an initial set of Advanced APM determinations for APMs that will be operating during the first Qualifying Participant Performance Period no later than January 1, 2017.

What qualifies as a MIPS APM?

MIPS APMs are APMs that enable participating eligible clinicians and groups to leverage the MIPS APM scoring standard. MIPS APMs must meet the base definition of APMs as well as the following criteria:

  • APM Entities participate in the APM under an agreement with CMS or by law or regulation.
  • The APM requires that APM Entities include at least one MIPS eligible clinician on a Participation List, which is the list associated with physicians and entities participating in the APM.
  • The APM bases payment on performance (either at the APM Entity or eligible clinician level) on cost/utilization and quality measures.

Note that CMS has indicated that there may be MIPS APMs that would not be able to use the MIPS APM scoring standard due to technical or resource issues (e.g. the performance period ending earlier than the MIPS performance period).

What are APM Entities and APM Entity groups?
  • CMS has finalized the definition of APM Entity to mean an entity that participates in an APM or payment arrangement with CMS or another payer, respectively, either through a direct agreement with CMS or another payer or through federal or state law or regulation..
  • CMS has also finalized the definition of Advanced APM Entity to mean an APM Entity that participants in an Advanced APM or Other Payer Advanced APM with CMS or a non-Medicare other payer, respectively, through a direct agreement with CMS or the payer or through federal or state law or regulation.
  • As proposed, an APM Entity group refers to the group of eligible clinicians participating in an APM Entity, as identified by a combination of the APM identifier, APM Entity identifier, Taxpayer Identification Number (TIN), and National Provider Identifier (NPI) for each participating eligible clinician.
Tracking Qualifying Participant requirements

MACRA sets thresholds for the level of participation in Advanced APMs that are required for an eligible clinician to become a Qualifying Participant (QP) or Partial Qualifying Participant (Partial QP) for a given year. Eligible clinicians who meet Qualifying Participant requirements during the Qualifying Participant performance period are exempt from MIPS participation and will earn a 5% incentive payment. Partial QPs have the option to participate in MIPS will not earn an incentive payment for their Advanced APM participation.

QPs and Partial QPs must meet one of the following thresholds as it relates to participation in an Advanced APM during the 2017 performance year to be exempt from MIPS:

QP Threshold Partial QP Threshold
Medicare Payment Amount1 25% 20%
Medicare Patient Count2 20% 10%

1The Medicare Payment Amount percentage is defined as (All payments for Medicare Part B covered professional services furnished by the eligible clinicians in the Advanced APM Entity to attributed beneficiaries during the QP Performance Period/all payments for Medicare Part B covered professional services furnished by the eligible clinicians in the Advanced APM Entity to attribution-eligible beneficiaries during the QP Performance Period) * 100
2The Medicare Patient Count percentage is defined as (The number of unique attributed beneficiaries to whom eligible clinicians in the Advanced APM Entity furnish Medicare Part B covered professional services during the QP Performance Period/The number of attribution-eligible beneficiaries to whom eligible clinicians in the Advanced APM Entity furnish covered professional services during the QP Performance Period) * 100


Free MACRA Resources

Download, print, and share the following free reference sheets to keep the most important information about MACRA, MIPS, and APMs close at hand.

Measure List: 2017 MIPS Quality Measures (PDF and XLS)
Calendar: 2017 MIPS & APM Tracks
Flow Chart: Which Quality Payment Program track is right for you?
Reference Sheets: 2017 MIPS Requirements and Composite Score

FAQs about MACRA, MIPS, and APMs

What is MACRA?

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was passed in April 2015 and put into place three important changes to how Medicare pays providers who deliver services to Medicare beneficiaries:

  • Implementing a permanent “doc fix” by ending the Sustainable Growth Rate (SGR) formula for determining Medicare payments for health care providers’ services.
  • Developing a new framework called tfor rewarding health care providers for giving better care not more just more care.
  • Combining several existing Medicare quality reporting programs (PQRS, Meaningful Use, and the Value-Based Payment Modifier) into one new payment system called the Quality Payment Program.

Implementation details for many components of MACRA were finalized in October 2016 as part of the “Medicare Program; Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models” final rule with comment period.

What is the Quality Payment Program (QPP)?

The Quality Payment Program (QPP) puts into place key aspects of the MACRA by establishing a new framework for rewarding health care providers for the quality of services delivered to patients instead of just the quantity and combines existing quality reporting programs into one new system. Implementation details for the QPP were finalized in October 2016 as part of the CMS final rule “MIPS and APM Incentive under the Physician Fee Schedule.” The QPP offers two payment tracks for participating providers: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).

What is the Merit-Based Incentive Payment System (MIPS)?

The Merit-Based Incentive Payment System (MIPS) is one of the two tracks of the Quality Payment Program and combines the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier, and the Medicare EHR Incentive Program (Meaningful Use) into one program that measures eligible clinicians on four different performance categories: Quality, Cost (Resource Use), Advancing Care Information (which evaluates the meaningful use of certified EHR technology), and Improvement Activities (previously referred to as Clinical Practice Improvement Activities).

Results from the four MIPS performance categories are translated into points, which are combined into a single performance score called the MIPS Composite Score. The MIPS Composite Score is used to determine payment adjustments. During the 2017 performance year, CMS has finalized that the Resource Use (Cost) performance category will have a weighted value of 0%, so in 2017, the MIPS Composite Score will be determined based on performance in the other three performance categories.

What are Alternative Payment Models (APMs)?

Alternative Payment Models (APMs) are new ways to pay healthcare providers for the care that they deliver to Medicare beneficiaries. MACRA defines any of the following as a qualifying Alternative Payment Model (APM):

  • An innovative payment model expanded under the Center for Medicare & Medicaid Innovation (CMMI), with the exception of Health Care Innovation Award recipients;
  • A Medicare Shared Savings Program (MSSP) accountable care organization (ACO);
  • Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program; and
  • Another demonstration program required by federal law.
How do Advanced APMs differ from other APMs?

Advanced APMs are APMs that meet additional criteria related to infrastructure, provider payments, and risk. To qualify as an Advanced APM, a payment model must meet the definition of an Alternative Payment Model (APM) under MACRA and also:

  • Require participants to use certified EHR technology,
  • Provide payment for covered services based on quality measures comparable to the MIPS quality category, and
  • Be either a Medical Home Model or bear more than a nominal amount of monetary risk.

An eligible clinician receiving the designated percentage of Medicare payments or patients through an Advanced APM can be considered a Qualifying Participant (QP) or Partial Qualifying Participant (Partial QP), which exempts the provider from the MIPS payment adjustment and makes them eligible for a 5% Medicare Part B incentive payment.

What clinicians are eligible for MIPS and APM participation under MACRA?

Under the first two years of MACRA, a MIPS eligible clinician be defined as the following licensed providers and any group that includes such professionals:

  • Doctors of Medicine
  • Doctors of Osteopathy
  • Doctors of Dental Surgery/Dental Medicine
  • Doctors of Podiatry
  • Doctors of Optometry
  • Chiropractors
  • Physician Assistants
  • Nurse Practitioners
  • Clinical Nurse Specialists
  • Certified Registered Nurse Anesthetists

The above clinicians would be subject to payment adjustments beginning in 2019 if they do not successfully participate in MIPS, meet Advanced APM QP requirements, or meet other exclusion requirements in 2017. In future years, the list of MIPS eligible clinicians could expand to include the following clinicians:

  • Physical or occupational therapists
  • Speech-language pathologists
  • Audiologists
  • Nurse midwives
  • Clinical social workers
  • Clinical psychologists
  • Dietitians/nutritional professional
Which clinicians are excluded from MIPS?

CMS has finalized that the following clinicians will be excluded from the MIPS payment adjustment:

  • Healthcare providers from the list of MIPS eligible clinicians that meet the definition of Qualifying APM Participants and Partial Qualifying APM Participants who do not report data under MIPS
  • Providers whose volume of Medicare payments or patients fall below a specific threshold (Medicare billing charges that are less than or equal to $30,000 and provides care for 100 or fewer Medicare patients in one year)
  • Providers who are “new Medicare-enrolled eligible clinicians,” defined as a professional who first becomes a Medicare-enrolled eligible clinician within the PECOS during the performance year and who has not previously submitted claims as a Medicare-enrolled eligible clinician either as an individual, an entity, or a part of a physician group or under a different billing number or tax identifier

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Stay informed about MACRA, MIPS, and APMs

Be the first to know about key MACRA information, deadlines, and expert analysis. Below is a sample of recent updates and commentary.

Should I just do the minimum? 3 Reasons clinicians and groups are going all out in MIPS this year
MIPS Advancing Care Information: Frequently Asked Questions