FAQ on MACRA and Medicare Payment Reform

• What is the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)?
• What is the Quality Payment Program (QPP) and how does it relate to MACRA?
• What is the Merit-based Incentive Payment System (MIPS)?
• How will I be scored under MIPS?
• Who am I compared to?
• What if I am in a large multispecialty group?
• What if I opt out of Medicare?
• Does MIPS apply to employed physicians?
• What are the reporting methods?
• What is a virtual group?
• What are the reporting requirements under MIPS?
• Can I participate in MIPS without an EHR?
• What is a MIPS Value Pathway (MVP)?
• How will I be paid under MIPS?
• How is the payment adjustment applied?
• What if I change groups during the performance period?
• Can I appeal my payment adjustments?
• Are there any exemptions from MIPS?
• Are resident physicians excluded from MIPS?
• Are Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) exempt from MIPS?
• Is the low-volume threshold calculated at the group or individual level?
• When will I know my low-volume threshold status?
• How will I know if I'm a small practice?
• Are there hardship exceptions available?
• What is a MIPS APM?
• How can I get answers to my practice-specific questions?

What is the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)?

At a very high level, MACRA:

• Repealed the flawed Medicare sustainable growth rate (SGR) formula that calculated payment cuts for physicians;
• Created a new framework for rewarding physicians for providing higher quality care by establishing two tracks for Medicare payment:
  • Merit-based Incentive Payment System (MIPS), and
  • Advanced Alternative Payment Models (AAPMs); and
• Consolidated three previous quality reporting programs [Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VBPM), and meaningful use (MU)], plus added a new performance category, called improvement activities (IA), into a single system through MIPS.

What is the Quality Payment Program (QPP) and how does it relate to MACRA?

The Quality Payment Program (QPP) is the umbrella term used to describe the MIPS and AAPM tracks under MACRA.

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

The Merit-based Incentive Payment System (MIPS) consolidates previous quality reporting programs. The system also added a new performance category, called improvement activities (IA). Scores from the four categories are combined to establish a final score (0-100) that will be compared against a threshold. The final score is then used to determine physician payment adjustments. The categories that make up the MIPS final score are:

• Quality—based on PQRS;
• Cost—based on VBPM;
• Promoting Interoperability (PI)—based on MU; and
• Improvement activities—new performance category.

How will I be scored under MIPS?

Scores for each performance category will be weighted and rolled up into the MIPS final score.

MIPS final scores will be published by the Centers for Medicare & Medicaid (CMS) on the Physician Compare website(www.medicare.gov). 

Who am I compared to?

All MIPS-eligible clinicians (ECs), regardless of specialty, will be compared to each other and against a performance threshold.

What if I am in a large multispecialty group?

ECs in a large multispecialty group can report either as individuals or as a group. When reporting as a group, all ECs reporting under the group’s tax identification number (TIN) will be included. A group cannot have some ECs report as a group and others report as individuals. Under the group reporting option, all ECs must report on the same measures. If you choose to report as a group, you must report as a group across all four MIPS performance categories.

Beginning in 2026, multispecialty groups will be required to form subgroups to report MIPS Value Pathways (see below). 

What if I opt out of Medicare?

Physicians who have opted out of Medicare and do not accept payments from Medicare will not be affected by payment adjustments in MIPS.

Does MIPS apply to employed physicians?

Yes. While most employed physicians will report as part of a group, MIPS payment adjustments are applied at the national provider identifier (NPI) level. If an employed physician changes practices between the performance period and the payment year, the physician’s MIPS score and accompanying payment adjustment will apply to payment at the new practice. When making hiring decisions, potential employers may take your MIPS final score into consideration.

Additionally, employers may begin basing your compensation on your MIPS final score. Employed physicians will want to make sure they are appropriately compensated for a high MIPS score.

Find additional information about employment contracting on the AAFP’s Physician Employment Contracting webpage.

What are the reporting methods?

Reporting methods for individuals include: claims, qualified clinical data registry (QCDR), qualified registry, and electronic health records (EHR). The promoting interoperability and improvement activities categories will include attestation options through the CMS Portal(qpp.cms.gov). There is no data submission for the cost performance category, as CMS will calculate this for ECs based on Medicare claims data.

Reporting methods for groups include: claims (15 or fewer ECs only), QCDR, qualified registry, EHR, and CMS-approved survey vendor for the Consumer Assessment of Health Providers and Surveys (CAHPS) for MIPS. Groups will also be able to attest for the promoting interoperability and improvement activities performance categories. 

Eligible clinicians can find approved qualified registry and QCDR vendors in the QPP resource library(www.cms.gov). ECs can find out if their EHR is certified by searching the Certified Health IT Product List (CHPL)(chpl.healthit.gov).

What is a virtual group?

Solo and group practices (10 or fewer NPIs) can join together to participate in MIPS as a virtual group. A virtual group must consist of at least two TINs. Virtual groups are designed to help small practices successfully participate in MIPS.

What are the reporting requirements under MIPS?

Quality

In the quality performance category, you must report at least six measures, including one outcome measure. ECs must report on at least 70% of patients eligible for the measure, regardless of payer. This is referred to as “data completeness criteria.” The quality category accounts for 45% of the MIPS final score.

In addition to the six measures reported by ECs, CMS will calculate the Hospital-wide, 30-day, All-cause Unplanned Readmission Rate for MIPS Groups and Risk Standardized, All-cause Unplanned Admissions for Patients with Multiple Chronic Conditions for groups of 16 or more ECs.  

Cost

There is no reporting requirement for ECs under the cost category. CMS will calculate the clinician’s performance using claims data. Cost accounts for 30% of the MIPS final score. Clinicians will be assessed on their performance of Total per Capita Cost, Medicare Spending per Beneficiary (MSPB), per clinician and applicable episode-based measures. 

Improvement Activities

ECs can attest to beig a certified or recognized patient-centered medical homes (PCMH) and receive full credit in the improvement activities category.  

Additionally, if at least 50% of practice sites under the TIN have PCMH recognition, the entire TIN will qualify for full points in the improvement activities performance category.

Clinicians who do not qualify for the full credit must attest to two high-weighted (20 points each) or four medium-weighted (10 points each) activities, or a combination of both to achieve a total of 40 points. An activity must be performed for at least 90 consecutive days during the performance period to receive credit. At least 50% of clinicians within the practice must perform the same activity for a continuous 90-day period within the performance year.

To ease the burden for small practices (15 or fewer ECs), practices in rural areas or health professional shortage areas (HPSAs), CMS requires submission of one high-weighted activity or two medium-weighted activities.

Promoting Interoperability

Scores for this category are based on an EC or group's performance on a set of required measures. ECs must also attest to completing certain actions, such as completing an annual security risk analysis. An EC cannot earn more than 100 points (100%) in the PI performance category. ECs must report a minimum 90 consecutive days for the PI category.

 ECs must have 2015 Edition certified electronic health record technology (CEHRT) in place for the PI performance period.  

Can I participate in MIPS without an EHR?

Clinicians without an EHR can still participate in MIPS but will not be eligible for any of the points under the PI performance category. Use of EHR technology that is not certified will result in a zero for the category.

While still possible to participate in MIPS without an EHR, the reporting requirements will be more burdensome without the use of an EHR. The reporting mechanisms available to a practice without an EHR would be claims or qualified registry. However, use of the qualified registry option would require a manual data collection process.  

What is a MIPS Value Pathway (MVP)?

MVPs are a reporting option that are meant to reduce the burden of MIPS reporting and prepare practices for participation in an alternative payment model (APM). MVPs are groups of measures and activities centered around a specific condition or specialty.

Individual ECs and groups can report using an MVP. Additionally, practices may form subgroups. A subgroup allows a larger practice to report multiple MVPs, depending on which MVP is relevant to the physicians in the subgroup. For example, a multispecialty group that includes cardiology and primary care may choose to form two subgroups - a subgroup with ECs that provide cardiology care and a subgroup with ECs that provide primary care. Subgroup reporting is currently optional. However, beginning with the 2026 performance year, multispecialty groups will be required to form subgroups to report MVPs.

Learn more about MPVs in FPM Journal.

How will I be paid under MIPS?

MIPS are eligible for positive or negative Medicare Part B payment adjustments of up to 9%. Distribution of payment adjustments will be made on a sliding scale and will be budget neutral. Payment adjustments will be based on the following:

• Physicians with a final score at the threshold will receive a neutral payment adjustment.
  
• Physicians with a final score above the threshold will receive a positive payment adjustment on each Medicare Part B claim in the payment year.
  
• Physicians with a final score below the threshold will receive a negative payment adjustment on each Medicare Part B claim in the payment year.
  
• Physicians with a final score in the lowest quartile will automatically be adjusted to the maximum negative adjustment on each Medicare Part B claim in the payment year.
  

How is the payment adjustment applied?

The Centers for Medicare & Medicaid Services will apply the MIPS payment adjustment at the TIN/NPI level. ECs who reported as a group will all receive the same final score, but the payment adjustment will be applied at the TIN/NPI level. Payment adjustments are made at the Medicare Part B claim level.

What if I change groups during the performance period?

If an EC bills under more than one TIN during the performance period, CMS will use the highest final score associated with the clinician’s NPI during the performance period to adjust payment in the payment year.

If a clinician changes TINs between the performance period and payment year, CMS will apply the final score associated with the clinician’s NPI during the performance period to the new TIN/NPI combination. For example, if a clinician practiced at TIN A during the performance period, but is practicing at TIN B during the payment year, CMS will use the final score from TIN A to apply to the payment adjustment to the new TIN B.

Can I appeal my payment adjustments?

Physicians can submit a request for a targeted review if they believe the information submitted to CMS has calculation errors, data quality issues, or if they clinician believes CMS has made errors in assigning score to MIPS-eligible clinicians (e.g., MIPS-eligible clinicians should have been subjected to the low-volume threshold).

Are there any exemptions from MIPS?

Yes. Exclusions from MIPS include:

• Clinicians in their first year of billing Medicare;
  
• Clinicians with their volume of Medicare payments or patients falling below the low-volume threshold (200 Medicare Part B patients OR $90,000 or less in Medicare Part B charges) OR 200 Medicare Part B services); and
  
• Clinicians who are qualifying participants (QP) in an AAPM.

Clinicians can check their MIPS-eligibility and QP status using the QPP Participation Status Tool(qpp.cms.gov).  

Clinicians that meet or exceed one or two, but not all, of the low-volume threshold criteria can opt-in to participate in MIPS. Clinicians who opt-in are eligible for positive and negative payment adjustments. Opt-in elections must be made through the QPP Portal and are in effect for the applicable performance year (i.e., they cannot be rescinded).

Are resident physicians excluded from MIPS?

Resident physicians in their second year of Medicare billing and who are billing under their own NPI would be subject to MIPS adjustments. Resident physicians in their first year of billing would be considered new to Medicare and excluded from MIPS.

Are Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) exempt from MIPS?

Payments for items and services made under a Federally Qualified Health Center (FQHC) or Rural Health Clinic (RHC) all-inclusive payment are exempt from MIPS. However, any Medicare Part B items and services provided and billed outside of the all-inclusive payment at FQHCs and RHCs will be subject to MIPS payment adjustments. FQHCs and RHCs are still subject to the low-volume threshold.

Is the low-volume threshold calculated at the group or individual level?

CMS calculates the low-volume threshold at both the group and individual level, but it is up to the clinician whether they participate at the individual or group level. For example, an EC may not be eligible at the individual level, but their group may be eligible. In that instance, if all ECs in the practice participate as individuals, the EC would not be required to report. However, if the practice decides to report as a group, the EC would be included and would receive a final score and payment adjustment based on the group’s performance.

Additional information on MIPS eligibility is available on the Quality Payment Program website.

When will I know my low-volume threshold status?

The Centers for Medicare & Medicaid Services calculates an EC’s low-volume threshold status using two claims from two determination periods. CMS will not change the low-volume status of ECs who fall below the low-volume threshold during the first review period, but not the second. ECs can check their MIPS-eligibility status using the QPP Participation Status tool (qpp.cms.gov).

How will I know if I'm a small practice?

The Centers for Medicare & Medicaid Services defines a small practice as 15 or fewer ECs (small practice size for virtual groups is 10 or fewer ECs). This may include NPIs excluded from MIPS. CMS determines small practice status by analyzing claims, using the same dates as those used for determining low-volume threshold status. Small practice determinations will be available through the QPP Participation Status tool (qpp.cms.gov).

Are there hardship exceptions available?

There are two hardship exceptions available to ECs. This includes a significant hardship exception for the promoting interoperability category and an extreme and uncontrollable circumstances (e.g., natural disaster) exception for the quality, cost, and improvement activities categories.

What is a MIPS APM?

A MIPS APM includes APMs that did not qualify as AAPMs. MIPS APMs do not qualify as AAPMs because they either do not meet the nominal risk criteria or the AAPM participants do not meet the payment or patient thresholds. MIPS APM participants may report the APM Performance Pathway. MIPS APMs for the 2023 performance period include:

• ACO Realizing Equity Access and Community Health (REACH)
• Maryland Total Cost of Care Program – Care Redesign Program
• Maryland Total Cost of Care Model - Primary Care Program Tracks 1, 2, and 3
• Medicare Shared Savings Program (MSSP) All Tracks
• Primary Care First
• Vermont Medicare ACO Initiative (as part of the Vermont All-Payer ACO Model)
• Additional models will be announced by CMS as they are approved

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

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

Advanced Alternative Payment Models (AAPM) FAQ

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