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ChartLogic Team

Deciphering the Confusion of MACRA, MIPS & APM

July 25, 2016

Biller, Clinician, EHR 5 Minute Read

In April of this year, CMS released their proposal for comments to improve the current Meaningful Use program through the Medicare Access and CHIP Reauthorization Act (MACRA). Under MACRA, most physician offices are expected to participate in the Merit-Based Incentive Payment System (MIPS) starting January 1, 2017.

If this is your first dive into MACRA, MIPS, or Advanced Payment Model (APM), it may seem a bit daunting trying to understand its impact on you as a physician and your office.  So let’s break down MACRA and explain what is being proposed.


MACRA is new legislation that seeks to make changes on how Medicare pays out for services rendered to Medicare beneficiaries. The changes proposed by Centers for Medicare & Medicaid Services (CMS) under MACRA have created a new Quality Payment Program (QPP) that ends the Sustainable Growth Rate (SGR) formula for determining Medicare payments, establishes a new framework for rewarding health care providers for giving better care rather than more care, and combines existing quality reporting programs in one new system. The new QPP is a replacement of all other Medicare reporting programs under an easier system that allows physicians more flexibility.

MACRA only affects physician offices, not hospitals. As part of MACRA, the definition of eligible providers (EPs) has expanded to now include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and groups that include such clinicians.  MACRA is also only focusing on Medicare physicians who would be reimbursed.  Medicaid physicians would remain on the current Electronic Health Record (EHR) Incentive program.

Along with the expanded eligible physician definition, MACRA aims to start all physicians January 1, 2017 for a one-year reporting period.  Amongst the various rules and reporting periods for MACRA, it introduces the QPP that breaks down into two paths that bring quality to payments. Physicians will either participate under MIPS or under APM.  The majority of physicians will first participate under MIPS and then slowly transition to APM. MIPS is a new program under MACRAs QPP that joins Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM), the medicare EHR incentive into one program.


Under MIPS, the rules are broken down into four categories:

  1. Quality
  2. Advancing Care Information
  3. Cost/Resource Use
  4. Clinical Practice Improvements

MIPS has essentially renamed existing programs to fit into one of these categories. PQRS is now the Quality category; while, Meaningful Use is now called Advancing Care Information.  The Value-based Payment Modifier program has been moved to the Cost/Resource Use category.  MIPS has also introduced the Clinical Practice Improvement’s category as the fourth category to MIPS.  During the first year, each category will make up a certain percentage to the physician’s overall score under the MIPS program, which in return will result in a penalty or a payment as a lump sum in 2019.

MIPS aims to simplify the Quality category by only requiring six PQRS measures across any domain with one still being a cross-cutting measure.  MIPS is also proposing the elimination of Clinical Decision Support (CDS) and Computerized Provider Order Entry (CPOE) for Meaningful Use Stage 3.  While under the Cost/Resource Use category, they are looking at Value-Based Modifiers as they move from fee-for-service to pay-for-performance.


APM is the secondary QPP path that physicians can take.  APM is an alternative way for physicians to get paid for care rendered to Medicare beneficiaries.  Starting in 2019, physicians can be paid out in lump-sum incentive payments and in 2026 physicians participating in this program can start receiving higher annual payments.  These incentives come through increased transparency of physician-focused payment models.  Accountable Care Organizations (ACOs), Patient Centered Medical Homes, and bundled payment models are just a few examples of an APM.

Physicians can only participate in 2019 and 2020 through advanced APMs.  Starting in 2021 physicians can participate through a combination of APMs and APMs with other payers.

What Does This Mean to You?

If you are a physician office, MACRA is just a consolidation of Meaningful Use, PQRS, and VBM into one program: MIPS with the addition of APM starting in 2019.  The majority of physicians will be participating in MIPS for the first few years until they can qualify under the APM. Physician offices should keep trying to meet the Modified Stage 2 requirements if their EHR system isn’t ready for Stage 3.  If a physician office’s EHR system is ready for Stage 3, then they can begin focusing on those measures. However, the final rule of MACRA isn’t due until sometime in September or October and the true impact will not be known until then.

Nevertheless, even as recent as July 13, the acting Administrator of CMS Andy Slavitt said during a Senate Finance Committee meeting that CMS may choose to delay the implementation of MACRA.  During the committee meeting, Slavitt also mentioned that they have received public comment on how difficult it will be for small, rural, and independent practices to implement the new MACRA rules by January 1, 2017.  Slavitt also noted that physicians need more flexibility and time to adapt to the changes under MACRA.

In the end, MACRA may just end up like the MU program. It might be difficult at first, but it will get easier as the physician and Health IT companies play a more active voice in letting CMS know the impact of their changes to small and rural-based physicians.,1

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