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Medical Coding News Archives

MACRA Proposed Rule Defines Two Part B Payment Tracks

May 23, 2016:

A proposed rule containing regulations implementing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was issued April 27 by the Centers for Medicare and Medicaid Services and published May 9, 2016, in the Federal Register. The rule lays out proposals for changing how Medicare incorporates quality measurement into physician payments and for providing incentives to participate in alternative payment models (APMs).

Preliminary reactions in the health care industry are mixed as interested parties comb through the nearly 1,000-page rule. The American Medical Association is largely positive about the regulations, reporting that it had the opportunity to voice its concerns and it supports the legislation’s end goal of improving patient care while keeping physician practice’s sustainable and offering payment flexibility. The American Hospital Association issued a brief statement criticizing the narrow definition of alternative payment models (APM) in the rule but adds the caveat that its staff are still analyzing the mammoth document.

In a nutshell, the rule outlines a “Quality Payment Program” with two payment tracks for Medicare Part B clinicians: a merit-based incentive payment system (MIPS) and payment under advanced APMs. The program’s first year will be 2017.


In the first year of the program, CMS states that nearly all physicians will be paid under MIPS so that the agency can determine which clinicians qualify for the advanced APM track of payment. MIPS consolidates the Physician Quality Reporting System, the physician value-based payment modifier (VM), and Medicare’s electronic health record (EHR) incentive program.

Clinicians will start being measured in four MIPS categories for all patients (not just Medicare) in January 2017. The resulting score will drive Medicare payment adjustments up, down, or neutral in 2019. Over five years, these adjustments will increase from a cap of 4 percent of Part B payments in 2019 to 9 percent by 2022 and after.

The four MIPS categories are:

Quality (50 percent of the year 1 score): This replaces the PQRS and the quality component of VM. To acknowledge differences among practices, the rule would allow physicians to choose to report just six of nine measures currently required under PQRS.

Advancing care information (25 percent of the year 1 score): This replaces the “Meaningful Use” program for EHR systems. Clinicians can choose among customizable measures of how their day-to-day operations employ EHR technology. This category does not require all-or-nothing measurement or quality reporting.

Clinical practice improvement activities (15 percent of the year 1 score): Rewards will be based on certain activities (90+ proposed activities available) aimed at improving care, such as those focused on patient safety or care coordination. This is where clinicians will receive credit for participating in APMs or patient-centered medical homes.

Cost (10 percent of the year 1 score): This replaces the VM program. The score is based on Medicare claims and does not rely on physician reporting.


For the first year, the only providers exempted from being paid under MIPS will be those new to Medicare, with $10,000 or less in Medicare charges or 100 or fewer Medicare patients in one year, or those significantly participating in APMs.

In subsequent years, as clinicians adjust to new operating and reporting requirements, CMS expects more clinicians will participate in advanced APMs “to a sufficient extent” that would exempt them from MIPS and qualify them for a 5 percent incentive payment under Medicare Part B. The extent considered sufficient to qualify for this incentive payment would increase over time. For 2019, a clinician would have to receive either at least 25 percent of payments or 20 percent of his or her patients through an advanced APM. By 2024, these thresholds rise to 75 percent of payments or 50 percent of patients.

Advanced APMs are those care models that accept both risk and reward for providing coordinated, high-quality, efficient care. The following models currently qualify as advanced APMs: .

• Comprehensive ESRD care model

• Comprehensive primary care plus (CPC+)

• Medicare Shared Savings Program—tracks 2 and 3

• Next-generation ACO model

• Oncology care model two-sided risk arrangement (available in 2018)

CMS will allow clinicians to move between MIPS and APM payment models, depending on their changing circumstances. The agency even provides an “intermediate track,” which allows clinicians to choose whether they would like to receive the MIPS payment adjustment if they do not quite meet the APM payment or patient participation requirements for incentive payments but they do meet a lower threshold.

The Department of Health and Human Services will accept comments on the proposed rule through June 27, 2016.


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