MACRA Final Rule

MACRA Final Rule Resources

The Centers for Medicare & Medicaid Services (CMS) released the highly anticipated Final Rule establishing the new Medicare payment methodology for physician services furnished under Medicare Part B, known as the Quality Payment Program (QPP), as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). For more information, visit CMS’s QPP website.

The QPP offers Eligible Clinicians two participation options: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). While this new methodology applies to payments beginning in CY 2019, reporting for the first year of the QPP begins in 2017.

MIPS is expected to be the primary track for participation in the QPP. MIPS consolidates components of three existing incentive payment programs – the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for eligible professionals (also known as the Meaningful Use program) – and establishes a new metric for measuring performance. Under MIPS, Eligible Clinicians (a defined term) will be measured in four performance categories: Quality, Clinical Practice Improvement Activities (CPIA), Advancing Care Information and Cost (previously referred to as Resource Use). Once fully phased-in, a clinician’s overall performance score in these four categories determines the amount of an annual payment adjustment.

The Advanced APM track is an alternative to MIPS. Eligible Clinicians who participate to a sufficient extent in Advanced APMs would qualify for financial bonuses. These individuals are referred to as Qualifying APM participants (QPs).

January 1, 2017 is the start date for MIPS. CMS shortened the performance period to 90 days for CY 2017.  Eligible Clinicians now have various participation options for 2017.


  • No Reporting/Participation.  Eligible Clinicians can choose to not report any data under MIPS in 2017; Medicare payments for non-participants will be reduced 4 percent in 2017 (maximum penalties will gradually increase to 9 percent negative adjustments by 2022).
  • Minimal Reporting.  Eligible Clinicians can submit a single measure in the Quality performance category, a single activity in the CPIA category or the required measures in the ACI category. Eligible Clinicians who choose this category will not be subject to payment penalties, but also will not be eligible for a positive performance payment adjustment.
  • Partial to Complete Reporting:  Eligible Clinicians who report for a minimum of 90 continuous days within 2017 will be protected from receiving a negative payment adjustment, and will be eligible for a positive payment adjustment.  The level of the positive payment adjustments will depend on how much data are submitted and performance results. Upward payment adjustments may be scaled to achieve budget neutrality as required by MACRA.
  • Advanced APM track: Eligible Clinicians who adequately participate in models that qualify as Advanced APMs in 2017 can select the APM track. These clinicians will receive a 5 percent positive Medicare payment adjustment in 2019 and avoid MIPS reporting and MIPS-related payment adjustments.

The MACRA legislation allows for the creation of virtual groups through which solo and small practices may band together in “virtual groups” to coordinate MIPS reporting. Virtual groups will not be implemented until the 2018 performance year.

MIPS: A weight of zero will be assigned to the ACI performance category for hospital-based MIPS Eligible Clinicians and re-weight the score for hospital-based clinicians, and MIPS eligible clinicians that were exempt from the Medicare EHR Incentive Program or received hardship exemptions. CMS lowered the threshold of professional services furnished in a certain site of service to determine hospital-based MIPS eligible clinicians from 90 percent to 75 percent. The definition of hospital-based clinicians includes on-campus outpatient hospital (POS 22) in addition to inpatient and emergency room.  As such, clinician who furnishes 75 percent or more of his or her covered professional services in an on-campus outpatient hospital setting also will receive a zero weight for the ACI category.

CMS will redistribute the weight of the ACI category to Quality when the provider does not receive a score for the ACI category. Additionally, for CY 2017, CMS decided to give no weight to the Cost performance category, and to shift that 10 percent to the Quality performance category, thereby increasing the Quality weight from 50 percent to 60 percent. As such, for those with no ACI score in 2017, the ACI is re-weighted to Quality and as the Quality performance category would be weighted at 85 percent and CPIA at 15 percent. CMS will gradually increase the weight of the Cost category to 30 percent by the 2021 payment year.

CMS reduced the CPIA requirement to require that small practices, rural practices, or practices located in geographic health professional shortage areas, as well as non-patient facing MIPS Eligible Clinicians, need only report one high-weighted or two medium-weighted activities.

CMS finalized the following submission methods for the Quality performance category:

Reporting individually: claims, QCDR, qualified registry and EHR.

Reporting as a group: QCDR, qualified registry, EHR, CMS Web Interface (groups of 25 or more), CMS-approved survey vendor for the Consumer Assessment of Healthcare Providers & Systems survey MIPS (must be reported in conjunction with another data submission mechanism) and administrative claims (for all-cause hospital readmission measure, no submission required).

Download this table which summarizes the CMS’s response to comments from the Ambulatory Surgery Center Association (ASCA) on specific aspects of the Proposed Rule. Please write Kara Newbury at with any questions.