MACRA Proposed Rule: CMS presents a flexible approach that steers clinicians toward alternative payment models

May 05, 2016

Health Care Alert

Author(s): Valerie Breslin Montague

Centers for Medicare and Medicaid Services recently issued a proposed rule addressing compensation for value and quality of care. This alert discusses what physicians and other clinicians need to know.

On April 27, 2016, the Centers for Medicare and Medicaid Services (CMS) released a Notice of Proposed Rulemaking to implement portions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Proposed Rule). The Proposed Rule details CMS’s new payment approach, which emphasizes and rewards the use of interoperable health information technology by physicians and other Medicare Part B clinicians and that steers clinicians toward alternative payment models.


Under MACRA, Congress created a new framework for clinician Medicare incentive payments, attempting to reward clinicians for better care and consolidating quality reporting. This law repealed the Sustainable Growth Rate formula and created two quality-based programs: the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Models (APMs). The MACRA MIPS structure incentivizes clinicians by measuring performance in four categories: quality, resource use, clinical practice improvement activities and meaningful use of certified electronic health records (EHR) technology. MACRA also provides that clinicians participating in Center for Medicare and Medicaid Innovation models (excluding Health Care Innovation Awards), Medicare Shared Savings Programs (MSSP), Health Care Quality Demonstration Program demonstrations or other demonstrations required by federal law may qualify for incentive payments under the Advanced APM structure.

Proposed Rule

The Proposed Rule establishes an overall Quality Payment Program (QPP) framework that encompasses both Advanced APMs and the MIPS structure. CMS will begin measuring performance under the QPP in January 2017 and analyze a year’s worth of data prior to disbursement of payments based on the QPP measures in 2019. Although CMS anticipates that most clinicians initially will participate in the QPP through MIPS (estimated at between 687,000 to 746,000 clinicians, as compared to an estimated 30,658 to 90,000 participating through APMs), the QPP is structured to incentivize clinicians to move toward Advanced APM participation.


The Proposed Rule retained three of the MIPS performance categories established by MACRA (Quality, Resource Use and Clinical Practice Improvement Activities) and tweaked the fourth (Meaningful Use of Certified EHR Technology is now Advancing Care Information). Clinicians submitting data under the MIPS structure will receive a Composite Performance Score (CPS) based on their cumulative performance in each category. For 2017, the CPS will be divided as follows: 50% for Quality, 25% for Advancing Care Information, 15% for Clinical Practice Improvement Activities and 10% for Resource Use. These percentages will be adjusted over time; for example, in 2021, the performance percentage for Quality will decrease to 30% and the performance percentage for Resource Use will increase to 30%. The CPS will be analyzed against a performance threshold. Clinicians whose CPS exceeds the threshold will receive a positive MIPS adjustment factor, those underneath the threshold will receive a negative adjustment factor and those at the threshold will receive a “neutral” adjustment factor.


For 2017, CMS proposes to maintain a majority of the Physician Quality Reporting System measures and adds many specialty-specific measures as well. Clinicians can choose to report on six quality measures or to report a specialty measure set designed around certain conditions and specialties.

Resource use

This category will analyze more than 40 episode-specific measures to determine which clinicians achieve the most efficient, high-quality care. CMS proposes that clinicians’ performance in this category will be analyzed based on Medicare claims data; clinicians would not need to submit additional information for this category.

Clinical Practice Improvement Activity

In the Proposed Rule, CMS states that it intends for the Clinical Practice Improvement Activity (CPIA) category to incentivize improved health outcomes and a movement toward APMs. CMS proposes over 90 activities that clinicians may choose to report. For example, one CPIA subcategory is care coordination, which includes activities such as timely exchange of clinical information to patients and other clinicians, the use of telehealth and timely communication of test results. Certain of the measures in the CPIA category will be weighted based on CMS priorities.

Advancing Care Information

This category replaces the Medicare EHR Incentive Program for eligible professionals and is designed to measure how clinicians use technology in their daily practices. It eliminates the “all-or-nothing” approach and attempts to eliminate the much-criticized redundant reporting obligations. The Advancing Care Information (ACI) category reduces the number of quality reporting measures from 18 to 11 and removes reporting requirements for clinical decision support and computerized provider order entry (determined to not be an effective measure of EHR performance and use based on clinicians’ consistently high performance under these measures). CMS states that its intent is to provide flexibility and incentivize clinicians to focus on the portions of certified EHR technology that are the most applicable to their practices.

The ACI category requires clinicians to use certified EHR technology; in 2017, clinicians may use EHR technology certified to either the Office of the National Coordinator for Health Information Technology’s (ONC) 2014 or 2015 edition, but in 2018, clinicians must only use EHR technology certified to the ONC 2015 edition.

In order for a clinician to receive any score in the ACI category, the clinician must affirm that the clinician protects patient health information. In compliance with the HIPAA regulations, this measure requires clinicians to conduct or review a security risk analysis, implement any necessary security updates and correct any security deficiencies. The ACI base score analyzes electronic prescribing, patient electronic access, coordination of care through patient engagement, health information exchange and public health and clinical data registry reporting. For their performance score, clinicians may select from three objectives: patient electronic access (addressing patient access and patient-specific education), coordination of care through patient engagement (analyzing view, download, transmit (VDT), secure messaging, and patient-generated health data) and health information exchange (addressing patient care record exchange, request/acceptance of patient care record and clinical information reconciliation).

CMS also proposes to require each clinician to attest that he or she will cooperate with certain authorized IT surveillance and oversight activities permitted under the ONC Health IT Certification Program Modifications final rule. Clinicians using certified EHR technology, or technology that can be used to meet the certification requirements, will be asked to respond to requests for information regarding the performance of the technology and to accommodate requests for access by ONC or one of its certification bodies to allow them to directly review the technology.

Advanced APMs

For the first two years analyzed under the QPP, CMS proposes that the Advanced APMs will be focused on “traditional” Medicare. These include the Comprehensive End-Stage Renal Disease Care Model Care Model (Large Dialysis Organization arrangement), the Comprehensive Primary Care Plus (CPC+), the MSSP—Track 2, the MSSP—Track 3, the Next Generation Accountable Care Organization Model and the Oncology Care Model Two-Sided Risk Arrangement (which will be available in 2018). In the future, CMS may approve certain Other Payer Advanced APMs, including APMs developed by Medicaid programs or commercial payers.

Clinicians must participate in Advanced APMs “to a sufficient extent” in order to qualify for Medicare incentive payments under the Advanced APM structure. Clinicians must treat enough patients through an Advanced APM or receive enough of their payments through the Advanced APM to qualify. These participation requirements are specified in MACRA and are scheduled to increase over time. A benefit to qualifying under the Advanced APM structure rather than the MIPS structure is that clinicians do not need to report any data under the MIPS measures.

In addition to other requirements, the Proposed Rule establishes that an Advanced APM entity must require at least 50% of its clinicians to use certified EHR technology to document and communicate clinical care information in 2017. In 2018, this requirement increases to 75% of the APM entity’s clinicians, as CMS states that adoption of certified EHR technology is critical to its key objectives regarding care coordination, quality measure reporting, clinical decision support and other factors influencing the success of APMs.

If a clinician participates in an Advanced APM but fails to meet the payment or patient participation requirements under the APM structure, the clinician may be able to receive an incentive payment under the MIPS structure. In this scenario, the clinician’s APM participation can be credited toward the clinician’s score in the MIPS CPIA category.

In 2017, CMS is proposing that all clinicians report through MIPS, and it will analyze whether the clinicians qualify for incentive payments in the Advanced APM structure following the MIPS information submissions.

The Proposed Rule is available here and is scheduled to be published in the Federal Register on May 9, 2016. CMS is accepting public comments on the Proposed Rule through June 27, 2016.

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