On November 4, 2016, the Centers for Medicare & Medicaid Services (CMS) published a final rule with comment period (Final Rule) implementing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The Final Rule overhauls the methodology by which most physicians and certain other clinicians participating in Medicare will be reimbursed and marks a significant shift away from fee-for-service payments and toward value-based reimbursement. Under the Final Rule, CMS created the Quality Payment Program (QPP), which incorporates components of the Physician Quality Reporting System (PQRS), the Medicare Electronic Health Record Incentive Program for Eligible Professionals (commonly known as Meaningful Use), and the Physician Value-Based Payment Modifier (VM).


The Final Rule applies to “eligible clinicians,” who are physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and groups that include such professionals who bill under Medicare Part B.

Except: Eligible clinicians (individually or as a group) who have less than or equal to $30,000 in Part B allowed charges or who care for fewer than 100 Part B-enrolled Medicare beneficiaries in a performance year; and newly enrolled Medicare providers.


Eligible clinicians can choose one of two ways of participating in the QPP and avoiding a negative adjustment to their Medicare Part B reimbursement.  Eligible clinicians that choose not to participate in either MIPS or Advanced APMs (described below) will receive a downward payment adjustment of 4 percent in 2019.


 Merit-based Incentive Payment System (MIPS)

  • Receive positive, neutral or negative payment adjustments based on reporting and performance measures of: cost, quality, improvement activities & use of electronic health record technology (or advancing care information, “ACI”).
  • Three options to participate in 2017:
    • Report one quality measure, one improvement activity measure, or all five required ACI measures, and receive no 2019 payment adjustment.
    • Report measures for at least 90 continuous days and qualify to receive a small positive payment adjustment. Eligible clinicians that choose this option must report six quality measures (or one specialty-specific measure set), four improvement activity measures, and five ACI measures.
    • Report the measures required for the second option for a full year and qualify to receive up to a 4 percent positive payment adjustment.

Advanced Alternative Payment Model (APM)

  • In 2017, eligible clinicians who receive 25 percent of their Medicare payments or see 20 percent of their Medicare patients through an Advanced APM will receive a 5 percent positive payment adjustment in 2019.
  • The threshold percentages for receiving an incentive payment will eventually increase to 75 percent of Medicare payments and 50 percent of Medicare patients.
  • An Advanced APM must (1) require use of CEHRT, (2) include a payment mechanism based on quality measures similar to those outlined in MIPS, and (3) require participants to bear more than a nominal amount of risk or be a medical home.
    • CMS will finalize a list of Advanced APMs by January 1, 2017 and are expected to include:
      • ACOs in tracks 2 and 3 of the Medicare Shared Savings Program
      • Next Generation ACO Model
      • Comprehensive Primary Care Plus Model
      • Comprehensive End-Stage Renal Disease Care Model
      • Comprehensive Care for Joint Replacement Model
    • CMS also introduced the possibility of creating a new MSSP ACO Track 1 “Plus,” on which CMS will release additional information in the future.


 QPP begins January 1, 2017, with the first payment adjustments becoming effective in 2019.