MACRA Basics

    Merit-based Incentive Payment System (MIPS)

    The Medicare Access and CHIP Reauthorization Act (MACRA) permanently repealed the flawed sustainable growth rate (SGR) and set up the two-track Quality Payment Program (QPP) that emphasizes value-based payment models. This is your guide to the Merit-based Incentive Payment System (MIPS) track.

    MIPS: One of Two Payment Tracks Under the Quality Payment Program (QPP)

    MIPS adjusts Medicare Part B payments based on performance in four performance categories: quality, cost, promoting interoperability, and improvement activities. The other track created under MACRA is the Advanced Alternative Payment Model (AAPM) track.  

    MIPS Performance Categories, Weights, and Thresholds

    Performance categories carry different weights that will shift as the program progresses.

    Performance Periods
    Performance Category
    2020 2021 2022
    Quality 45% 40%* 30%*
    Cost 15% 20%* 30%*
    Promoting Interoperability 25% 25% 25%
    Improvement Activities
    15% 15% 15%

    *Estimated weights – CMS will revisit the quality and cost category weights. However, they are required to be equally weighted at 30% by the 2022 performance year.

    Performance in each category is weighted and used to calculate a final score (0-100). Each eligible clinician’s (EC’s) or group’s final score is compared to a performance threshold to determine payment adjustments. The performance threshold for the 2020 performance period is 45 points.

    • Final scores above the threshold will receive a positive payment adjustment.
    • Final scores below the threshold will receive a negative payment adjustment.
    • ECs in the lowest quartile will receive the maximum payment adjustment for a performance period.
    • Final scores equal to the threshold will receive a neutral payment adjustment.

    MIPS Payment Adjustments

    Payment adjustments are budget neutral and made on a sliding scale. To maintain budget neutrality, physicians with higher final scores may be eligible for a positive payment adjustment up to three times the baseline positive payment adjustment for a given year.

    Payment adjustments, based on the final score, are based on performance from two years prior (e.g., performance in 2020 determines payment adjustments in 2022). Adjustments are made on the following sliding scale:

    Performance Year Payment Year Potential Positive/Negative Payment Adjustment
    2018 2020 ±5%
    2019 2021 ±7%
    2020 2022 ±9%
    2021 2023 ±9%

    Exceptional performers that meet the additional performance threshold could receive an additional sliding scale positive payment adjustment of up to 10%. The exceptional performance threshold for the 2020 performance period has been set at 85. Exceptional performance adjustments occur outside of budget neutrality.

    MIPS Participation Options

    Physicians can participate as either individuals or groups. When reporting as a group, all ECs reporting within the tax identification number (TIN) must be included in the group’s reporting. The MIPS final score will be applied to each national provider identifier (NPI) within the TIN. Additionally, a TIN cannot be split into multiple groups.

    Eligible clinicians excluded from MIPS include:

    • Eligible clinicians who provide care to less than or equal to 200 Medicare Part B patients OR have less than or equal to $90,000 in Medicare Part B allowed charges OR provide less than or equal to 200 Medicare Part B covered services.
    • Eligible clinicians in their first year of participation in Medicare.
    • Qualifying and partial qualifying Advanced Alternative Payment Model (AAPM) participants who qualify for the AAPM bonus. Partial QPs may elect to report to MIPS.

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

    MIPS: Reporting for Each Performance Category

    Note: percentage weights and criteria based on the 2020 performance period.

    Quality – 45%

    • Physicians report six measures, one of which must be an outcome measure. The reporting period is an entire calendar year.
    • The Centers for Medicare & Medicaid Services (CMS) will use claims data to calculate the all-cause hospital readmission measure for groups of 16 or more eligible clinicians who have at least 200 eligible cases.
    • Physicians must report on 70% of patients that qualify for each measure selected, regardless of payer. If you are reporting via claims or the CMS Web Interface,  only Medicare Part B patients are included.
    • Each measure is worth up to 10 points. Scores are based on performance compared to a benchmark.
    • Bonus points are available for reporting additional outcome or patient experience measures (two points) or other high-priority measures (one point). Physicians can also earn one bonus point for each measure submitted using electronic end-to-end reporting.

    Review quality measures on the CMS Quality Payment Program website.

    Cost  – 15%

    • No data submission is required.
    • CMS calculates cost using claims data.
    • Measures include Medicare Spending per Beneficiary (MSPB) per clinician, Total per Capita Cost, and 18 episode-based measures. The current episode-based measures do not apply to most family physicians.
    • An EC’s performance is compared against a benchmark and assigned 1 to 10 points. The cost category score is the aggregate of all scored cost measures.
    • CMS is developing additional episode-based cost measures for use in future program years.
    • Review cost measures on the CMS Quality Payment program website.

    Promoting Interoperability (PI) – 25%

    • ECs must report on a set of required measures and are scored based on performance.
    • Failure to report any of the required measures will result in a score of zero for the entire performance category.
    • ECs must use 2015 Edition certified electronic health record technology (CEHRT) for the 90 days they selected to report the promoting interoperability performance category.
    • ECs can apply for a hardship exception. If granted, the PI category weight will be reassigned to the quality category.
    • Review promoting interoperability measures on the CMS Quality Payment Program website.

    Improvement Activities – 15%

    • Physicians will report two high-weighted activities (20 points each) or four medium-weighted activities (10 points each), or a combination of both to achieve a total of 40 points.
    • Eligible clinicians in small practices (15 or fewer clinicians), rural practices, or health professional shortage areas (HPSA) can report one high-weighted activity or two medium-weighted activities (measures are double weighted).
    • Certified or recognized patient-centered medical homes (PCMH) will receive full credit.
    • Activities must be completed for at least 90 consecutive days. At least 50% of ECs within a group must perform the same activity during any continuous 90-day period in the same performance year.
    • Review improvement activities on the CMS Quality Payment Program website.

    MIPS Reporting Options

    Last updated: February 2020

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