MACRA The Changing Landscape of Value-Based Medicare Payments

There’s been a lot of news coverage recently about the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Passed in April of last year, the legislation, according to CMS, is intended to:

  • Repeal the Sustainable Growth Rate (SGR) Formula
  • Change the way that Medicare rewards clinicians for value over volume
  • Streamline multiple quality programs under the new Merit Based Incentive Payments System (MIPS)
  • Provide bonus payments for participation in eligible alternative payment models (APMs)

MACRA offers multiple pathways with varying levels of risk and reward for providers to tie more of their Medicare payments to value. It’s important for providers to demonstrate value because they’re rewarded for giving better care not just more care.

On April 27, 2016, CMS issued key parameters for the new quality payment program, replacing the patchwork system of Medicare reporting programs with a flexible model that allows providers to choose from two paths that link quality to payments: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).

Under MIPS, CMS proposes that eligible clinicians receive a composite score relative to their performance in each of the four categories listed below. Quality measures for these segments will be reviewed by CMS annually and the data made available to the public on the CMS Physician Compare website. The four performance categories are:

  1. Quality: 50 percent of total score in year 1
  2. Advancing Care Information: 25 percent of total score in year 1, formerly EHR Meaningful Use
  3. Clinical Practice Improvement Activities: 15 percent of total score in year 1, this is essentially the “new” domain added to the previously existing other three
  4. Cost or Resource Use: 10 percent of total score in year 1, based on Medicare claims data — no new reporting necessary

Physicians who choose to be paid under a CMS-approved Alternative Payment Model (APM), rather than Fee-For-Service, are exempt from participating in MIPS. The standards for advanced APMs:

  1. Require participants to bear a certain amount of financial risk.
  2. Base payments on quality measures comparable to those used in the MIPS quality performance category.
  3. Require participants to use certified EHR technology.

1 Federal Register, Daily Journal of the United States Government. "Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive Under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models," Retrieved from (
2 Medicare.Gov Physician Compare (retrieved from