What Is MACRA? Article
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is a law that reformed the Medicare payment system. MACRA repealed the Sustainable Growth Rate (SGR) formula used to update the Medicare Physician Fee Schedule (MPFS) and thereby determine physician reimbursement. The SGR was replaced with a “value-based” payment system that incorporates quality measurement into payments with the goal of creating an equitable payment system for physicians. MACRA also reauthorized the Children’s Health Insurance Program (CHIP).
The Permanent Doc Fix
On April 16, 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015—the largest change to the American healthcare system since the Affordable Care Act of 2010. Overwhelmingly endorsed by Democrats and Republicans in an uncommon moment of bipartisanship in Congress, MACRA ended the way Medicare Part B providers were disadvantageously reimbursed through the SGR.
MACRA is known as the Permanent Doc Fix because it revised the flawed 1997 Balanced Budget Act,which resulted in exorbitant reimbursement reductions that incited physicians to threaten to leave the Medicare program.
From 2002 to the enactment of MACRA in 2015, Congress voted 17 times to delay the implementation of the SGR to prevent SGR-calculated cuts from taking place. If not for the enactment of MACRA, the Medicare program—as well as persons who rely on it to receive medical care—would have been at risk.
By law, MACRA required the Centers for Medicare & Medicaid Services (CMS) to establish value-based healthcare business models that link an ever-increasing portion of physician payments to service-value rather than service-volume. These incentive-based business models, collectively referred to as the Quality Payment Program (QPP), provide two participation tracks for eligible clinicians—the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs)—both of which involve levels of financial rewards and risks.
Unlike previous quality initiatives, participation in the QPP does not require providers to enroll. Eligible clinicians need only choose which track they prefer—MIPS or Advanced APMs—based on their practice size, specialty, location, and patient population.
MACRA Healthcare Reform At-a-Glance
methodology from the determination of annual conversion factors in the formula for payment for physicians' services
Introduced a new methodology focused on alternative payment models to reward clinicians for value over volume
Invoked sunset of legacy programs—Physician Quality Reporting System (PQRS), Value-Based Payment Modifier (Value Modifier), and Medicare EHR Incentive Program (known also as Meaningful Use or MU)—now streamlined in the new Merit Based Incentive Payments System (MIPS)
Allotted bonus payments for participation in eligible Alternative Payment Models (APMs)
The MIPS track of the QPP pertains only to providers of professional services paid under Medicare Part B. CMS defines MIPS eligible clinicians—identified by their unique billing Tax Identification Number (TIN) and 10-digit National Provider Identifier (NPI) combination—as clinicians of the following types who meet or exceed the low-volume threshold:
Certified Registered Nurse Anesthetists
Clinical Nurse Specialists
Doctors of Chiropractic
Doctors of Dental Medicine
Doctors of Dental Surgery
Doctors of Medicine
Doctors of Optometry
Doctors of Osteopathy
Doctors of Podiatric Medicine
Qualified Speech-Language Pathologists
Registered Dietitian or Nutrition Professionals
For the 2020 performance year, the three criteria of the low-volume threshold that establish MIPS eligibility of approved clinician types are those who bill Medicare for $90,000 or more in Medicare Part B allowed charges, and provide care for 200 or more Medicare Part B beneficiaries, and provide 200 or more Medicare Part B covered professional services under the MPFS.
Groups or virtual groups with one or more MIPS eligible clinicians are also eligible. Additionally, clinicians who meet or exceed one or two of the low-volume threshold criteria can opt in to participate in MIPS.
As of Year 3, MIPS eligibility is determined from two consecutive 12-month look-back periods. In keeping with the fiscal year, the two determination periods for 2020 are Oct. 1, 2018 to Sept. 30, 2019, and Oct. 1, 2019 to Sept. 30, 2020. Eligibility, however, is based solely on the first 12-month period.
Check Your MIPS Eligibility
If you’re unsure about your MIPS eligibility status, you can enter your NPI number in CMS’ QPP Participation Status tool, which will tell you, by performance year, whether you’re eligible to participate in the MIPS program track.
MIPS Exclusions & Exceptions
An eligible clinician may be excluded from MIPS payment adjustments if the clinician is:
A new Medicare-enrolled MIPS eligible clinician who has not, under any billing number or tax identifier, previously submitted a claim to Medicare as an individual or as part of a group
A Qualifying APM Participant (QP) or Partial QP in an Advanced APM
In addition to exclusions from MIPS, CMS provides a number of exceptions designed to meet the needs of small practices, practices located in rural areas, non-patient facing individual MIPS eligible clinicians or groups, and individual MIPS eligible clinicians and groups that participate in a MIPS APM or a Patient-centered Medical Home.
In the wake of hurricanes Harvey, Irma, and Maria, CMS added a natural disaster provision for extreme and uncontrollable circumstances in the MACRA Year 2 Final Rule (2018). This provision automatically exempts MIPS eligible clinicians affected by a natural disaster or public health emergency in a designated region (such as FEMA-designated major disaster) for the performance year.
These MIPS eligible clinicians, identified as affected by the automatic extreme and uncontrollable policy, will have their four performance categories automatically reweighted to 0% unless they submit data for two or more performance categories. This policy applies only to the eligible clinicians so identified, and not to group or virtual group participation.
If extreme and uncontrollable circumstances—such as a practice closure, severe financial distress, or vendor issue—render an eligible clinician unable to submit MIPS data, the clinician can apply for reweighting of any or all MIPS performance categories. Significant hardship exception applications must be submitted by Dec. 31 of the performance year. If granted, exceptions will extend to the eligible clinician’s group or virtual group.
Note: Small practices seeking a significant hardship exception from the Promoting Interoperability performance category in Year 4 (2020) must submit applications to CMS by December 31, 2019, to avoid a payment penalty in 2022.
MIPS Performance Categories
MIPS tracks data in four performance categories: Quality, Cost, Improvement Activities, and Promoting Interoperability. Each category is weighted and contributes to a MIPS eligible clinician’s or group’s final score.
MIPS Year 4 performance categories and weights in the final score are:
2020 MIPS CATEGORIES
CostQualityImprovement ActivitiesPromoting Interoperability15%45%15%25%
MIPS Cost Performance Category
The Cost category assesses eligible clinicians and groups on the resources used to treat attributed Medicare beneficiaries. In the 2020 performance year, Cost performance accounts for 15% of a MIPS final score. Unlike other MIPS categories that require data submission, cost performance is measured via Medicare Part B claims data.
MIPS participants are awarded points based on their cost performance against measure benchmarks. In 2020, the Cost performance category measures include:
Total per Capita Cost measure
Medicare Spending per Beneficiary (MSPB) measure
MIPS Quality Performance Category
Quality is worth 45% of an eligible clinician’s or group’s MIPS final score in the 2020 performance year. MIPS participants can choose from over 206 quality measures and must submit a full year of data on six quality measures for compliance in this category. Each measure is worth up to 10 points, with the number of points earned based on data completeness compared to national benchmarks.
Achieving the highest score in the Quality performance category (60 points) requires MIPS eligible clinicians to report at least one outcome measure or high-priority measure. A high-priority measure is a MIPS quality measure listed in the categories for outcome, appropriate use, patient safety, efficiency, patient experience, care coordination, or opioid-related measures.
Although a final MIPS score cannot exceed 100%, eligible clinicians (excluding CMS Web Interface reporters) can earn extra credit, adding 1 bonus point to a final MIPS score for every additional high-priority measure reported.
MIPS Improvement Activities Performance Category
The MIPS Improvement Activities category identifies measures for improving clinical practice or care delivery that potentially result in improved patient outcomes. Improvement activities focus on care coordination, patient engagement, and patient safety.
Improvement Activities updates in Year 4 include 2 new activities, 7 modified activities, and 15 removed activities. This category is worth 15% of the MIPS final score. To earn full credit, a clinician or group must complete activities equal to a maximum 50 points or successfully participate in a Patient-centered Medical Home or Medical Home payment model, or in a similar specialty practice and a MIPS APM.
MIPS Promoting Interoperability Performance Category
Promoting Interoperability, formerly called Advancing Care Information, requires the meaningful use of certified electronic health record technology (CEHRT), which thereby continues the effort for the secure exchange of health information. The foremost intention driving this category, however, is to create a patient-driven healthcare system where patients have the information needed to become active healthcare consumers.
Promoting Interoperability is worth 25% of the MIPS final score for most providers. In some cases, a provider may qualify for an exception from Promoting Interoperability. If granted an exception in performance year 2020, the Promoting Interoperability category will be reweighted to 0%, and the Quality performance category will be increased from 45% to 70%.
MIPS Final Score
MIPS scores assess an eligible clinician’s overall performance in the four MIPS categories compared to the CMS performance threshold score. Eligible clinicians will receive a score in each performance category, which is then weighted accordingly and totaled in their final score. The final MIPS score, which ranges from 0-100 points, will determine the payment adjustment an eligible clinician receives.
The performance threshold defines the score required to earn a neutral to positive payment adjustment for a given year.
Scores below the performance threshold result in a negative payment adjustment.
Scores at the performance threshold result in a neutral payment adjustment.
Scores above the performance threshold result in a positive payment adjustment.
The 2020 MIPS performance threshold is 45 points.
To receive a neutral payment in 2022, then, MIPS eligible clinicians will need to earn a final score of 45 points. The performance threshold has risen steadily since MACRA Year 1, increasing from 30 points in 2019, or Year 3. Clinicians, in other words, will need to invest more effort in 2020 to avoid penalties and earn a payment incentive.
MIPS PERFORMANCE THRESHOLD SCORES
2017201820192020Year 1Year 2Year 3Year 43 points earned by submitting a single Quality measure or attesting to performing one improvement activity for 90 days15 points achieved in multiple pathways30 points achieved in multiple pathways45 points achieved in multiple pathways
On the horizon for 2021, CMS plans to increase the performance threshold to 60 points. By 2022, the performance threshold will be calculated as the average of final scores nationwide for that year—which means the number of physicians receiving a negative payment adjustment will increase each year, until approximately half of participating clinicians receive a negative payment adjustment by the 2022 performance year.
On the positive side of this development, the amount of money available to fund positive payment adjustments will increase significantly year after year, so that those who maximize a practice’s MIPS performance will begin to see significant positive financial incentives.
MIPS Bonus Points
CMS has set the additional performance threshold for exceptional performance at 85 points. MIPS participants who meet or exceed a final score of 85 points will be eligible for an additional positive payment adjustment of their Medicare Part B payments for exceptional performance.
The complex patient bonus is one of several opportunities to add bonus points to a MIPS final score. Up to five bonus points may be awarded, depending on the level of clinical complexity and risk of the clinician’s patient population. Bonus determination relies on two indicators:
Medical complexity, as measured through average Hierarchical Condition Category (HCC) risk scores
Social risk, as measured through the proportion of patients with dual eligible for both Medicare and Medicaid benefits
Other MIPS bonus point opportunities include the following for the Quality performance category:
2 points for each additional outcome and patient experience measure
1 point for each additional high-priority measure
Cap bonus points at 10 percent of category denominator
10 percentage points based on improvement in the Quality performance category from the previous year
A clinician’s MIPS final score, however, cannot exceed 100 points, even if bonus points result in a score greater than 100. Additional payment adjustments for exceptional performance (scores equal to or greater than 85 points) will be awarded to MIPS participants on a linear sliding scale starting at 0.5%. While the sliding scale ensures the total expenditure for exceptional performance doesn’t exceed $500 million, it also means that bonus payments will be proportionally awarded to MIPS providers who earn the highest overall performance scores.
MIPS Performance-Payment Timeline
Based on a provider’s MIPS performance score, a payment adjustment is applied to the Medicare payment of every Part B item and service billed by the provider. The payment adjustment is received in the payment year, two years after the performance year.
TWO-YEAR PERFORMANCE-PAYMENT GAP
Performance PeriodYear 2
Performance PeriodYear 3
Performance PeriodYear 4
Performance PeriodYear 5
Performance PeriodYear 6
Performance PeriodYear 1
Payment YearYear 2
Payment YearYear 3
Payment YearYear 4
Gear Up for Optimal MACRA
Reimbursement & Reward
AAPC's 2020 MACRA Proficiency Course
CMS estimates that MIPS eligible clinicians who choose not to participate in MIPS lose an average 8.2% in Part B reimbursement. That amounts to a hefty sum when you consider an 8.2% loss on every Part B item and service billed by a provider. A potential annual Medicare reimbursement of $100,000, for example, becomes $82,000—minus $18,000 in much-needed revenue. So, here’s the $18,000 question:
What Does MACRA Mean for Physicians?
MACRA rewards physicians for shifting to value over volume through the MIPS track of the QPP and can greatly enhance a clinician’s profit margin through better Medicare reimbursement.
But a clinician’s MIPS score has broader implications that translate into more far-reaching and long-term rewards. It’s vitally important, therefore, for the MIPS clinician and staff—from medical coders and billers to clinical documentation specialists, auditors, and practice managers—to educate themselves every year on updates to the MACRA Final Rule.
Understandably, MIPS performance depends on knowledge of ever-evolving MIPS reporting requirements. Without current and reliable MACRA proficiency, a physician’s far-reaching and long-term rewards can fast become far-reaching and long-term penalties. Here’s why.
MIPS Is Competition
MIPS points are scored on a peer-percentile benchmark scale, which essentially means that MIPS clinicians compete against each other, and the winners who score big profit on two fronts—revenue and reputation.
Because MACRA is budget neutral, the law requires MIPS financial penalties to fund MIPS financial rewards. Low-performing MIPS clinicians who earn negative reimbursement adjustments, in other words, pay for the positive incentives their high-performing peers receive.
In the first two years of MACRA, CMS made it relatively easy for MIPS clinicians to avoid penalties. A corollary to this accommodation meant high-performing clinicians received lower than expected incentive payments. In MACRA Year 3, however, CMS increased the program difficulty, and raised reporting requirements again in Year 4. For 2020, this translates into bigger financial gains or losses at stake for MIPS participants.
Still, CMS caps the maximum upward adjustments it awards at three times the maximum negative adjustment, which limits the moneys available for financial rewards. The implications of this raise the bar for high performers. While each point a clinician scores above the performance threshold results in higher incentives, exactly how much one clinician’s score will earn depends on the performance of every clinician.
The only way to ensure you receive the maximum available incentive payment is to recognize the competition factor and ambitiously invest in your MIPS performance. Again, this will require onboarding your team and making sure all staff are fluent in MACRA Year 4, equipped with working knowledge of current MIPS requirements.
MIPS Means PR
MIPS financial rewards extend beyond Part B incentive payments. You could say, in fact, that Part B incentive payments are just the tips of the iceberg in terms of potential revenue gains associated with MIPS performance.
MIPS scores become clinician marketing—free advertising for exceptional performers, as well as potential liability for underperformers.
By law, MACRA requires CMS to publish MIPS final scores and performance category scores on every MIPS participant within 12 months of the performance year through CMS’ online portal, Physician Compare.
In its efforts for optimal transparency—as consumers spend more out-of-pocket for their healthcare—CMS has taken public reporting a step further by making Physician Compare datasets available to third-party physician rating websites. This means your MIPS score will affect patient attraction among all commercial payer populations, as well as Medicare beneficiaries.
What's more, to ensure MIPS performance measures clearly delineate peer-to-peer comparisons, the MACRA Final Rule instituted a 5-star rating system in 2018 to help healthcare consumers accurately interpret the MIPS 100-point performance scale.
As with any business, revenue and reputation go hand in hand. Research demonstrates that online physician reviews drive patient healthcare decisions—that more consumers rely on physician reviews than any other U.S. service or product, according to Harvard Business School. Its analysis of Yelp reviews, for instance, show a 5-9% revenue increase linked to each star on a 5-star scale—meaning that a 5-star rating can potentially boost a clinician’s annual revenue by 36%.
Voluntarily opting into MIPS, for those whose participation is not mandatory, deserves serious consideration, as the program automatically serves as the frontline initiative of practice marketing and pays in big dividends.
But the risks to underperforming in MIPS are equally substantial, which underscores the need for eligible clinicians to provide their staff with expert MACRA education each year to avert damage to their reputations and ensure they reap the rewards they deserve.
Understand that MIPS scores are irrevocable, a permanent part of public record. Furthermore, CMS ties MIPS scores to the practitioner so that scores follow the practitioner from one practice to another. If, for example, a clinician performs poorly in 2020 and joins a group in 2021, the new group will inherit the clinician’s 2020 performance via his or her 2022 payment adjustment.
MIPS scores, therefore, give clinicians a tremendous advantage or, possibly, a handicap. Performances will not only impact patient attraction and retention but also physician recruiting, contracting, and compensation plans.
MIPS Reporting Requirements
In most cases, eligible clinicians will be scored in all four categories, and a MIPS composite, or final score, will determine their Medicare payment adjustments.
MIPS participants can choose to report as a group or individually. If clinicians collectively submit their MIPS data as a group, each eligible clinician in the group will receive the same payment adjustment based on the group’s final score. Groups are defined by a single TIN, while individuals are defined at the TIN/NPI level.
Highlights to Year 4 MIPS reporting requirement updates include:
Quality: CMS has raised the data completeness threshold to 70% for the Quality performance category.
Improvement Activities: In the Improvement Activities category, groups can attest to an improvement activity when a minimum of 50% of the clinicians perform the activity for a continuous 90-day period in the performance year.
Promoting Interoperability (PI): CMS added the Query of Prescription Drug Monitoring Program (PDMP) measure as an optional measure (available for bonus points) and removed the Verify Opioid Treatment Agreement measure from the PI performance category. Additionally, the threshold for a group to be considered hospital-based has been reduced from 100% of clinicians being a hospital-based individual MIPS eligible clinician to 75% of the clinicians.
Meeting MIPS Reporting Requirements
Set your reporting goals for the performance period.
Determine which improvement activities you’re already doing and consider implementing other activities to boost your MIPS final score.
Review the Quality measures and select those that apply to the provider’s patient mix. The more measures you report on, the higher your chances of an increased score.
Ensure your coder is a CPC or an AAPC specialty-certified coder. Accurate coding to the highest level of specificity is essential to clinicians receiving proper credit in MIPS.
to identify your most costly patient population conditions and diagnoses. Identify targeted care delivery plans for these conditions.
If you haven’t adopted CEHRT, explore the cost and opportunity.
Determine if the clinician or group qualifies for an exception or special accommodations in MIPS scoring.
Keep an eye on your projected MIPS final score throughout the performance period.
For help estimating your final MIPS score on a 100-points scale, plug your Quality, Improvement Activities, and Promoting Interoperability data into AAPC’s MACRA Calculator Tool.
PERFORMANCE CATEGORYWEIGHTREPORTING REQUIREMENTSCost15%No reporting requirement; data pulled from administrative claims.
To be scored:
Case minimum of 20 for Total Per Capita
Case minimum of 35 for MSPB
Case minimum of 10 for procedural episodes
Case minimum of 20 for acute inpatient medical condition episodes
Quality45%Report a full year of data on 6 measures, including 1 outcome or high priority measure, or all measures in a specialty measure setImprovement Activities15%Groups of 16+ clinicians: Report on a minimum of 4 medium weighted activities or 2 high-weighted activities for at least a continuous 90-day period
Small practices (15 or fewer clinicians): Report 1 high-weighted or 2 medium-weighted activities for at least a continuous 90-day periodPromoting Interoperability25%
Must use 2015 Edition Certified EHR Technology for more than 90 consecutive days in the performance period
Submit a “Yes” to the Prevention of Information Blocking Attestation
Submit a “Yes” to the ONC Direct Review Attestation
Submit a “Yes” to the Security Risk Analysis measure
Report the required measures under each objective or claim the exclusions, if applicable
2020 MIPS Data Submission
The types of MIPS data submission mechanisms haven’t changed in 2020. The restriction to 1 data submission mechanism per performance category that began in 2018, however, no longer applies. Once again, eligible clinicians can submit a single measure using multiple collection types and be scored on the data submission with the highest number of achievement points.
MIPS Data Submission Tips
Assign a certified professional coder to audit medical documentation to ensure it meets requirements to support quality measures.
Determine if reporting as an individual or group improves your clinicians’ MIPS final score.
Clinicians billing under more than one TIN should report their MIPS data through each group to earn bonuses.
Determine a submission mechanism for MIPS quality data to CMS (i.e., Claims, EHR, QCDR, etc.). Remember, though, that not all measures can be submitted every way, so be sure to read each measure’s specification document carefully.
Contact your professional association about their clinical data registry options.
Retain MIPS data submitted to CMS for 6 years from the end of the MIPS performance period. This includes documents verifying your annual IT security risk assessment required for Promoting Interoperability performance.
MIPS-eligible clinician or groups billing Part B through a common TIN may choose from the collection types in the table below:
MIPS DATA SUBMISSION OPTIONS
Qualified Clinical Data
CMS Web Interface
CAHPS for MIPS
CMS Web Interface
CMS Web Interface