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Experience. Integrity. Advocacy.

Digging into MACRA’s Proposed Quality Payment Program


Last week, the Department of Health and Human Services unveiled its proposed plan to implement the major provisions of MACRA, the Medicare Access and CHIP Reauthorization Act passed by Congress in April 2015. The legislation fundamentally changes the way Medicare physicians are paid, moving away from volume-based reimbursement or fee-for-service and moving towards value-based reimbursement.

Two-Pronged Approach

Essentially, MACRA creates a two-pronged approach for physicians called the Quality Payment Program (QPP). Until the QPP ramps up in 2019, physicians will receive a .5 percent increase to the Medicare Physician Fee Schedule (MPFS) for 2017 and 2018 and will continue to be subject to the penalties and bonuses of the various quality programs currently in effect, like the Physician Quality Reporting System, the Value-Based Payment Modifier, Meaningful Use, and various alternative payment models. Beginning in 2019, however, the Quality Payment Program streamlines the various quality programs, and any increases or decreases in physicians’ reimbursement are tied to their participation.

The two prongs of the QPP are the Merit-based Incentive Payment System (MIPS) and the Advanced Alternative Payment Models (AAPMs). For both programs, the participation period is one year, and it affects payments two years following. So, for instance, the first participation period for QPP is 2017 which will affect payments in 2019. Most physicians will report through the MIPS program for the first year, and CMS will use that data to determine which providers meet the requirements for the APM track in subsequent years. However, physicians can switch between MIPS and APM annually if they are eligible.

Merit-based Incentive Payment System

MIPS rewards physicians who provide high-quality, low-cost care based on four areas of evaluation: quality care (formerly PQRS), cost-of-care/resource use (formerly VBPM), advancing care information program (formerly MU), and the new clinical practice improvement activities. The four categories will be weighted to come up with an overall composite score which will be compared with a performance threshold calculated from the performance of all eligible providers to determine the amount of negative or positive adjustment to physicians’ fees.


Categories Replaces 2019 Weighting 2020 Weighting 2021+ Weighting Reporting Details
Quality PQRS 50% 45% 30% 6 measures, including 1 cross-cutting measure
Advancing Care Information Meaningful Use 25% 25% 25% 50% credit for attesting. 50% based on 11 measures
Clinical practice improvement activities New 15% 15% 15% 60 points by activities worth either 20 points or 10 points from 90 choices in 9 categories.
Cost / Resource use VBPM 10% 15% 30% From Medicare claims covering 40 episode-specific measures.
Total Composite Performance Score 100% 100% 100%

Like the current Value-Based Modifier Program, MIPS is a budget neutral program and positive fee adjustments will be scaled by a factor (x) according to the total amount of negative adjustments applied.


Program 2015/2017* 2016/2018* 2017/2019 2018/2020 2019/2021 2020/2022
PQRS -2% -2%
MU -3% -4%
VBPM -4%/+4x -4%/+4x
MIPS -4%/+4x -5%/+5x -7%/+7x -9%/+9x
APM +5% +5% +5% +5%
*Physicians will receive a .5 percent increase to the Medicare Physician Fee Schedule in 2017 and 2018 regardless of the negative or positive adjustments in the quality programs.

Advanced Alternative Payment Models

Eligible Medicare providers who participate in AAPMs are exempt from the requirements of MIPS and would qualify for 5 percent financial bonuses each year from 2019 to 2024. (See table above.) However, these providers would take on substantial financial risk within the approved APMs in the program. Those models include the new Comprehensive Primary Care Plus (CPC+) model, the Next Generation ACO model, Patient Centered Medical Homes (PCMH), and certain bundled payment models.

Many clinicians who participate to some extent in Alternative Payment Models may not meet the law’s requirements for sufficient participation in the most advanced models. CMS expects the number of providers who qualify to participate in the AAPMs will increase as the program matures.

Only those APMs who meet the following criteria will be considered:

  • Use certified EHRs;
  • Pay providers based on quality measures comparable to those under MIPS; and
  • Assume more than a “nominal risk” for financial losses OR be an accredited PCMH.


Unlike some of the current quality programs, the QPP does provide exemptions for providers who are new to Medicare, have less than $10,000 in Medicare charges, or see 100 or fewer Medicare patients.

The Burden on Small Practices

While many industry leaders and professional groups are optimistic about the proposed guidelines, one big complaint about the proposed QPP is the burden it places on small practices. Most practitioners will not be eligible to participate in the AAPMs. And while the MIPS thresholds for successful participation are intended to be calculated so that half of all participants are above the threshold and half below, CMS itself projects that 87 percent of solo practitioners and 70 percent of practices with two to nine eligible practitioners will fall below the threshold and be subject to negative payment adjustments, resulting in a financial impact of $300 million and $279 million respectively. (See the table below for the impact on physician practices of various sizes.)


Practice Size Eligible Clinicians Percent Eligible Clinicians with Negative Adjustment Eligible Clinicians with Negative Adjustment Percent Eligible Clinicians with Positive Adjustment Eligible Clinicians with Positive Adjustment Eligible Clinicians with no Adjustment Aggregate Impact Negative Payment Adjustment ($ Mil) Aggregate Impact Positive Adjustment ($ Mil)
Solo 102,788 87.00% 89,383 12.90% 13,302 103 -$300 $105
2-9 eligible clinicians 123,695 69.90% 86,519 29.80% 36,887 289 -$279 $295
10-24 eligible clinicians 81,207 59.40% 48,213 40.30% 32,737 257 -$101 $164
25-99 eligible clinicians 147,976 44.90% 66,515 54.50% 80,588 873 -$95 $230
100 or more eligible clinicians 305,676 18.30% 56,045 81.30% 248,626 1,005 -$57 $539
Overall 761,342 45.50% 346,675 54.10% 412,140 2,527 -$833 $1,333

“It’s extremely concerning,” said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), in an interview with Medscape Medical News. “Any program like this should give physicians the opportunity to succeed regardless of practice size.”

“Most doctors aren’t aware of what’s coming,” said Linda Girgis, a family medicine physician in South River, N.J., in an interview with Physicians Practice. “Doctors are so pressured, we don’t have time to be reading up on this. The (MACRA) document, it’s more than 900 pages. It’s hard to know what’s going on. I think doctors are getting used to getting beat up, so they don’t care anymore.”

More Information

For more information about the proposed rule, review the HHS announcement or read through the 962 page rule, which includes specific measures proposed for all categories of the MIPS program. Kaiser Health News also has an informative FAQ page about the proposalthat covers a few other details not included in this summary.

The comment period for the proposed implementation of MACRA is open through June 27, 2016. Visit the CMS e-Rulemaking website for more information about submitting your comments.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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