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Final MACRA Rule

The Centers for Medicare and Medicaid Services (CMS) has adopted a final rule that implements the Medicare Quality Payment Program (QPP) pursuant to the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA repealed the sustainable growth rate formula, which was used to calculate physician fee schedule payments and, in its place, implemented the QPP. 

The QPP comprises two performance-based incentive payment pathways: (1) participation in the Merit-based Incentive Payment System (MIPS) or (2) participation in an Advanced Alternative Payment Model (APM). The majority of physicians and other affected clinicians will participate in MIPS. To ease the transition for these MIPS eligible clinicians, CMS adopted policies that will allow physicians to “pick their pace of participation” in MIPS in 2017.


MIPS consolidates components of the Physician Quality Reporting System (PQRS), the Value-Based Modifier and Meaningful Use into one, new program. Data from the 2017 performance year will be the basis for the 2019 MIPS payment year, meaning how MIPS eligible clinicians perform this year will have payment implications in 2019. 

To avoid a -4% payment adjustment in 2019, MIPS eligible clinicians must report at least one measure in each of the quality and improvement performance categories or report the four required measures in Advancing Care Information (ACI, formerly Meaningful Use).

For MIPS eligible clinicians who want to be eligible for a positive MIPS payment adjustment, they must report for a full 90-day period and must report more than one quality measure, more than one improvement activity or more than the four required ACI measures. 

To be eligible for the maximum positive payment adjustment, MIPS eligible clinicians must report all required MIPS measures for a full 90-day performance period. 

Full MIPS participation requires submitting data for 90 days on three performance categories: (1) quality, (2) improvement activities and (3) ACI. 

For 2017, the quality performance category will be weighted to comprise 60% of a MIPS eligible clinician’s MIPS score, and a MIPS eligible clinician must report on at least six quality measures. 

The improvement activities performance category will be weighted to comprise 15% of the MIPS eligible clinician’s MIPS score, and a MIPS eligible clinician must engage in either two high-weighted or four medium-weighted activities. 

The ACI performance category, which, again, transitions from the Meaningful Use program, will be weighted to comprise 25% of a MIPS eligible clinician’s MIPS score, and a MIPS eligible clinician must report on all four required measures. 

A fourth performance category, cost, will not be used to determine payment adjustments until 2018.

To explore the different MIPS measures and activities, you can visit the Quality Payment Program.

B.  APMs

Eligible clinicians who receive 25% of their Medicare Part B payments or see 20% of their Medicare patients through an APM in 2017 will be exempt from MIPS payment adjustments. Instead, these clinicians will qualify for bonuses in 2019 equal to 5% of their prior year’s payments for Part B covered professional services. 

Alternatively, physicians who receive 20% of their Medicare Part B payments or 10% of their Medicare patients through an APM may qualify as a “partial qualifying APM participant,” and, although they will not be eligible for the 5% lump sum bonus payment, they may opt out of MIPS.

C.  Looking Ahead

It is unlikely that MACRA will be affected by the Trump Administration’s repeal and replace efforts, even if a revised iteration of the American Health Care Act becomes law.  MACRA has strong bipartisan support. In fact, the Senate and the House voted in favor of MACRA 92-8 and 392-37, respectively. Moreover, MACRA is designed to incentivize providers to shift to value-based payment models, which should drive future Medicare cost savings — a budget issue important to the new administration. 

Accordingly, providers should move forward under the assumption that MACRA is here to stay. Further, while APMs could be affected by the repeal of the Affordable Care Act, because APMs are rooted in the Affordable Care Act, MIPS should not be affected, because MIPS is rooted in MACRA and not in the Affordable Care Act.

Barry Rosen
(410) 576-4224 • brosen@gfrlaw.com


June 19, 2017




Rosen, Barry F.


Health Care