The Centers for Medicare and Medicaid Services (CMS) uses the Medicare Physician Fee Schedule (PFS) to determine how to reimburse physicians for their services. Under the PFS, Medicare considers various elements including the work the physician put in, the expenses incurred in providing care, the cost of malpractice insurance, and geographic differences in wages to calculate how much physicians should be paid for their service. This system has been in place since 1992.
In 2015, a bipartisan Congress passed The Medicare Access and CHIP Reauthorization Act (MACRA), which makes sweeping changes to how Medicare makes the calculations for the PFS and other provider fee schedules. Under MACRA, participating providers are paid based on the quality and effectiveness of the care they provide. This new system, called the Quality Payment Program (QPP), is made up of two tracks in which providers will be placed based on the characteristics of their practice.
One track is called the Merit-based Incentive Payment System (MIPS). The MIPS combines parts of existing programs to form a new way of paying eligible clinicians (ECs) based on quality of care, resource use, clinical practice improvement activities, and use of certified electronic health record technology (CEHRT).
The other QPP track rewards clinicians who participate in advanced alternative payment models (APMs), which provide care for Medicare beneficiaries in new, value-based formats like accountable care organizations (ACOs).
CMS laid out the initial framework for how the QPP will operate in 2016, but has added (and will continue to add) more regulations and rules around the program as time goes on. The MACRA will have a significant impact not only on physicians and other clinicians, but also on the hospitals and health systems with whom they partner. The AHA is actively working with our partners to prepare the field for the implementation of these major changes.
MACRA Decision Guide
Are you interested in participating in alternative payment models in 2018 or beyond?
Qualified Participants (QPs)
Clinicians who demonstrate significant participation in advanced alternative payment models in 2017 based on the CMS methodology are “Qualified Participants” (QPs), exempt from reporting under the MIPS. QPs also earn an advanced APM incentive payment, payable in 2019 for clinicians designated as QPs in 2017.
Clinicians with significant participation in Medicare advanced APMs just slightly under the thresholds to qualify for an advanced APM incentive payment in 2017 still receive favorable treatment under the Quality Payment Program.
Clinicians who participate in Medicare APMs but do not qualify for exemption from MIPS (for example, because their payment model does not include downside risk, or their advanced APM volume is too low) may still receive favorable treatment under the Quality Payment Program.
Interested in exploring advanced APMs in future
Though there are limited options for Medicare advanced APM participation in 2017, CMS plans to increase the number of available Medicare advanced APMs in future years. In addition, beginning in 2019, clinicians may earn advanced APM incentives based on participation in advanced APMs across all payers.
Clinicians who are exempted due to low-Medicare volume
The MACRA provides an exemption for those eligible clinicians that have low volumes of Medicare patients. CMS has the authority to adjust the threshold through rulemaking.
The MIPS is the default payment track under the MACRA. It ties positive and negative payment adjustments to performance on quality, cost, improvement activities and advancing care information (i.e., the meaningful use of EHRs).
Rural providers are not explicitly excluded from the reporting requirements and potential payment adjustments under the MIPS. How rural facilities and clinicians are treated under the MIPS depends on the type of facility and how Medicare is billed for professional services.