Is Your Practice Prepared for MACRA?

April 1, 2021
April 1, 2021

The following blog post is taken from remarks by Karen Sorensen, AVP of National Initiatives at HealthStream, during a recent Webinar titled “MACRA and MIPS: Is Your Practice Leaving Money on the Table?”

By many accounts the Medicare Access and CHIP Reauthorization Act (MACRA) is one of the most significant pieces of legislation in U.S. healthcare. Yet some 64% of healthcare providers say they are unprepared, which could mean an avoidable 4% hit in Medicare payments to practices and healthcare organizations based on this year’s performance. Beginning in 2017, MACRA's Quality Payment Program affects providers who are paid under the Medicare physician fee schedule or Medicare part B.

The Quality Payment Program advances CMS’s ambitious goal to make Medicare a purchaser of value and quality rather than being a passive payer of claims. CMS has a very aggressive goal of tying 90% of all Medicare fee-for-service payments to quality and value by the end of 2018. Similar to other value-based reimbursement plans, the new Quality Payment Program rewards or penalizes participants with upward, neutral, or negative adjustments to their Medicare payments based on how well they perform on selected quality measures or how much they improve their performance on those measures.

Two Ways to Participate: Advanced APM and MIPS

There are two ways to participate in the program. First, the Advanced Alternative Payment Model (APM) incentivizes clinicians to provide high quality and cost-efficient care, while taking on some downside risk. To qualify for the Advanced APM path, clinicians must receive 25% of their payments through the APM or see 20% of their Medicare patients through the APM. This is a very hard threshold to achieve, which is why it's projected that only about 10% of clinicians will participate in the Quality Payment Program through an APM this year. To reward participation in this risk-based model, eligible participants will receive a 5% lump sum incentive payment each year they're participating through 2024, when they're expected to receive higher physician fee schedule payments.

The second pathway is the Merit-based Incentive Payment System or MIPS. For clinicians not participating in an advanced APM, three conditions must be met for MIPS participation:

  • Participation in Medicare for one year or longer
  • More than $30,000 in Medicare Part B payments per year
  • More than 100 Medicare beneficiaries per year


At least for the first few years, MIPS will apply to physicians, physician assistants, nurse practitioners, clinical nurse specialists, and CRNAs.

Not Everything Is New in MIPS

MIPS takes elements from three previous reporting programs and combines them into one. Those programs are the Physician Quality Reporting System, the Value-based Modifier, and the EHR Incentive program. If you are familiar with those programs, you're going to see some commonality under MIPS. Clinicians must submit their performance measures annually to determine if they're eligible for a positive, neutral, or negative adjustment to their Medicare payments.

CMS determines quality by a provider's performance in four categories: Quality, Advancing Care Information, Improvement Activities, and Cost. The Quality portion will make up 60% of the total MIPS score. This year, there are 271 different quality measures a practice can choose from, and most groups will need to report on six of these. Advancing Care Information, which replaces the previous EHR Incentive program, represents 25% of the score. A new category, Improvement Activities, will represent the remaining 15%. Practices can choose from over 90 activities in this category, and most will need to report on four. The final category is Cost, which replaces the Value-based Modifier. CMS will calculate the Cost measure using Medicare claims data beginning in payment year 2021.

High Stakes

Under the new Quality Payment Program, the stakes are very high, and frankly, that's what has everyone's attention. In 2019, the first payment year under MIPS, clinicians can earn a positive or negative 4% payment adjustment based on their performance in 2017. If they don't participate at all this year, they'll automatically receive a 4% downward adjustment to their Medicare payments in 2019. That percentage swells to 9% by 2022 and beyond.

During this transition year, CMS is allowing clinicians to pick their pace. Remember, those who don't participate at all will see 4% reduction in payments, but there is an option to test the program by submitting something to avoid the downward adjustment. And the more measures submitted, the greater the likelihood of earning a positive payment adjustment, and potentially a 5% bonus.

Listen to the full Webinar.