From Quantity to Quality: CMS MACRA Rule

On October 14, the Center for Medicare and Medicaid Services (CMS) released its final rule for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA marks a comprehensive shift from a fee-for-service based payment system to a value-based payment system for Medicare programs. CMS states in its rule that the change in payment plans “rewards the delivery of high-quality patient care.” The main goal of MACRA is to give incentives to Medicare and CHIP providers to give higher quality healthcare while also decreasing waste through a quality payment system instead of a quantity based payment system.

CMS released a proposed rule in April 2015, which received over 4,000 public comments. Many of the comments were submitted by practitioners who wanted more flexibility, simplicity, and support in transitioning from the Sustainable Growth Rate Formula to MACRA. CMS responded to these comments by creating a two track system, allowing physicians to go at their own pace in the transition process. This option is especially meant to help smaller practices that may need more time to make a full shift in their payment practices.  Physicians and practitioners can either participate in a Merit-Based Incentive Payment System (MIPS) or Alternative Payment Models (AMPs).

  • MIPS: Combines current quality and value Medicare payment programs (Physician Quality Reporting Program, Value-Based Payment Modifier, and Medicare EHR Incentive Program) and streamlines them into MIPS. MIPS works as an adjustment payment for physicians based on four factors: quality of care, resource use, clinical practice improvement activities, and meaningful use of certified electronic health records (EHR) technology. These factors will combine to create a composite performance score that will be used to calculate a positive, negative, or neutral payment adjustment. The adjustments will start at 4% in 2019 and rise to 9% by 2022.


  • Advanced AMPs: Some physicians may be considered Qualifying APM Participants (“QPs”) and therefore can participate in Advanced APM. In order to be considered a QP, a practitioner must “base payments on measures comparable to MIPS, require use of certified EHR technology, and either bear more than nominal financial risk for monetary losses, or be a medical home modeled that expanded under CMMI authority.” By 2021, this will require QPs to have a specific percentage threshold of their patients or payments be eligible through AMP. The Advance AMPs carry more risk for practitioners, but it also carries more reward, specifically the 5% lump sum bonus payments for 2019-2024.


Although the shift in payment methods will take a lot of work for many practitioners, especially smaller groups, it is a welcomed change. Sustainable Growth Rate Formula, the previous Medicare payment method, has been disliked by both sides of the aisle for many years.  Additionally, CMS responded to the comments on the proposed rule with a much appreciated flexibility for those practitioners who might need longer to make the proper changes.

The final rule will take effect January 1, 2017 and will contain a “transition year” with lower reporting standards.