FAQ on MACRA and Medicare Payment Reform

FAQ on MACRA and Medicare Payment Reform

Frequently Asked Questions: Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

How does the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) impact my Medicare payments?

MACRA impacts Medicare payments in three ways. The law:

  • Repeals the flawed Medicare sustainable growth rate (SGR) formula that calculated payment cuts for physicians.
  • Creates a new framework for rewarding physicians for providing higher quality care by establishing two tracks for payment: 
    • Merit-based Incentive Payment System (MIPS), and
    • Alternative Payment Models (APMs)
  • Consolidates three existing quality reporting programs, plus adds a new program, into a single system through MIPS:
    • Physician Quality Reporting System (PQRS)
    • Value-based Payment Modifier (VBPM)
    • Meaningful use (MU)
    • Clinical practice improvement activities (CPIA)

The following is a timeline for MACRA implementation:

  • 2016 through 2019: MACRA establishes a 0.5 percent physician fee schedule update each year.
  • January 2019: Based on qualification and eligibility, physicians may enter the APM track or the MIPS track.
  • 2020 through 2025: Medicare physician fee schedule updates remain at 2019 levels with no updates.

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

The Merit-based Incentive Payment System (MIPS) consolidates three existing quality reporting programs: the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VBPM), and meaningful use (MU). The system also adds a new program, called clinical practice improvement activities (CPIA). The four programs establish a composite performance score (0-100) used to determine physician payment. The categories are:

  • Quality – based on PQRS;
  • Resource use – based on VBPM;
  • Meaningful use of certified electronic health record (EHR) technology – based on MU; and
  • Clinical practice improvement activities – new program.

How would I be paid under MIPS?

According to the current legislation, beginning in 2019, physicians participating in MIPS will be eligible for positive or negative Medicare payment adjustments that start at 4 percent and gradually increase to 9 percent for 2022. The threshold for these payment adjustments will be the mean or median composite score for all MIPS-eligible professionals during the previous performance period. Distribution of payment adjustments will follow a bell-shaped curve on a sliding scale and will be budget neutral. Payment adjustments will be based on the following:

  • Physicians who score at the threshold will receive no payment adjustment.
  • Physicians whose composite score is above the mean will receive a positive payment adjustment on each Medicare Part B claim for the following year.
  • Physicians whose composite score is below the mean will receive a negative payment adjustment on each Medicare Part B claim for the following year.

Physicians with higher composite scores will be eligible for a positive payment adjustment up to three times the baseline positive payment adjustment for a given year. For example, the baseline positive payment adjustment for 2019 will be 4 percent, so the higher performers will be eligible for a positive payment adjustment of up to 12 percent. For 2019 through 2024, an additional positive payment adjustment of up to 10 percent will be available to “exceptional” performers. “Exceptional” has yet to be defined.

Beginning in 2026, all physicians participating in MIPS will be eligible for a 0.25 percent increase in their payments each year.

Are there any exemptions from MIPS?

Yes. Exemptions from MIPS include:

  • Providers in their first year billing Medicare;
  • Providers whose volume of Medicare payments or patients fall below the threshold (not yet defined); and
  • Providers who qualify for payment under APMs with the associated bonuses exempt from MIPS.

Additionally, it is anticipated that providers practicing in rural health clinics or Federally Qualified Health Clinics (FQHCs) are also exempt from MIPS.

What is an Alternative Payment Model (APM)?

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; or
  • Another demonstration program required by federal law.

In order for a provider to receive enhanced payment through a qualified APM, the APM must also meet the following eligibility requirements:

  • Use of quality measures comparable to measures under MIPS;
  • Use of a certified electronic health record (EHR) technology; and
  • Assumes more than a “nominal financial risk” (which is undefined), OR is a medical home expanded under the CMMI.

A physician receiving the designated percentage of Medicare payments or patients through a qualified, eligible APM based on the above requirements is considered a “qualifying participant” (QP).

How would I be paid under an APM?

If you are an APM qualifying participant, you will receive a 5 percent lump-sum bonus on your Medicare payments for 2019 through 2024. This bonus will be in addition to the incentive paid through existing contracts with the qualified APM (e.g., MSSP), demonstration program, etc. Beginning in 2026, you will qualify for a 0.75 percent increase in your payments each year.

How do I know if I’m in MIPS or an APM?

Most physicians will move through MIPS until more qualified, eligible APMs become available. The AAFP encourages our members to prepare for the APM track, as there is more financial security without the risk of penalties. However, family physicians interested in an APM model need to be prepared to start in the MIPS program.

How does MACRA help small practices?

There is $20 million a year allocated to provide technical assistance via Quality Improvement Organizations (QIOs) and Regional Extension Centers (RECs) to practices with 15 or fewer eligible professionals participating in an APM or MIPS. This assistance is intended to position practices to transition to APMs or to improve MIPS composite scores. Priority will be given to practices in rural areas, health professional shortage areas, and medically-underserved areas. 

What is the AAFP doing to help me?

As always, we’re committed to keeping you informed, developing resources to support your quality improvement efforts, and helping you provide cost-effective care. As information, tools, and resources to help you comply with and benefit from MACRA become available, we will update AAFP.org and spread the word through AAFP News and Family Practice Management (FPM).

We will also tell the Secretary of Health and Human Services (HHS) what family physicians think about provisions within MACRA. In particular, we will continue to advocate vigorously for the following:

  • Improved payment for primary care
  • Administrative simplification
  • Harmonization of measures across all private and public payers
  • Reasonable reporting requirements

What can I do now to prepare for MACRA implementation?

While the first year for MACRA is 2019, the AAFP anticipates that performance in 2017 may determine the threshold for the first year of MIPS in 2019. The AAFP is advocating on behalf of its members that the performance year be moved to 2018 to give physicians more time to prepare.

If you haven’t reported data on quality measures through the Physician Quality Reporting System (PQRS) or as part of meaningful use, start as soon as possible. Penalties for not reporting or for low quality may impact you this year. More information on Medicare penalties is available.

If you submitted quality data during the last calendar year, you should have access to your Quality and Resource Use Report (QRUR). This report will help you understand your performance in terms of cost and quality so you can prioritize potential areas for improvement.

If your practice doesn’t provide chronic care management (CCM) services, consider the cost-benefit opportunity for increasing revenue to support needed practice transformation or quality improvement projects. Medicare began paying for CCM codes on January 1, 2015. Information on CCM and resources to help you start providing CCM services in your practice are available.

Where can I find more information on MACRA?

Information, tools, and resources to help you comply with and benefit from MACRA are available from the AAFP and from FPM.

The latest news about MACRA and other payment reform topics is available from AAFP News.

How can I get answers to my practice-specific questions?

AAFP members can contact an AAFP subject matter expert or call (800) 274-2237.

Last updated: March 2016