What Is MACRA?

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 MACRA repealed the Sustainable Growth Rate (SGR) formula used to update the Medicare Physician Fee Schedule (MPFS) and thereby determine physician reimbursement.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

• Ended the Sustainable Growth Rate 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 MIPS
• Allotted bonus payments for participation in eligible Advanced Alternative Payment Models (APMs)

MIPS Eligibility

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:

For the 2023 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;
• 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.

MIPS eligibility is determined from two consecutive 12-month look-back periods. In keeping with the fiscal year, the two determination periods for 2023 are Oct. 1, 2021, to Sept. 30, 2022, and Oct. 1, 2022, to Sept. 30, 2023. 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 and 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 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.

Due to a variety of natural disasters, including Hurricanes Fiona and Ian, severe storms, and wildfires in specific states, MIPS eligible clinicians in Federal Emergency Management Agency (FEMA)-designated disaster areas, who are not participating in MIPS as a group, virtual group, or APM entity, will be automatically identified and receive a neutral payment adjustment for the 2022 performance year/2024 payment year. All four MIPS performance categories for these clinicians will be automatically weighted at 0 percent for the performance year. Clinicians who submit data on two or more categories will be scored as usual.

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.

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 7 performance categories and weights in the final score are:

MIPS Cost Performance Category

The Cost category assesses eligible clinicians and groups on the resources used to treat attributed Medicare beneficiaries. For the 2023 performance year, Cost performance accounts for 30 percent 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 2023, the Cost performance category measures include:

1. Total per Capita Cost measure
2. Medicare Spending per Beneficiary Clinician (MSPB-C) measure
3. Episode-based measures

MIPS Quality Performance Category

Quality is worth 30 percent of an eligible clinician’s or group’s MIPS final score in the 2023 performance year. MIPS participants can choose from hundreds of 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.

For the 2023 performance period, CMS moves away from using historical benchmarks for scoring administrative claims measures and will use performance period data. New measures will have a 7-point scoring floor for the first performance period and a 5-point scoring floor in the second performance period.

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.

The Improvement Activities category is worth 15 percent 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), promoting the secure exchange of health information. The foremost intention driving this category is to create a patient-driven healthcare system where patients have the information needed to become active healthcare consumers.

Promoting Interoperability is worth 25 percent of the MIPS final score for most providers. In some cases, a provider may qualify for an exception from this MIPS category. If granted an exception in performance year 2023, the Promoting Interoperability category will be reweighted to 0 percent, and the Quality performance category will be increased by 25 percent to 55 percent.

Note: The following providers will have automatic reweighting for the 2023 performance period:

• Clinical social workers;
• Physical therapists;
• Occupational therapists;
• Qualified speech-language pathologists;
• Qualified audiologists;
• Clinical psychologists; and
• Registered dieticians or nutrition professionals.

Small practices will also continue to qualify for automatic reweighting in performance year 2023. There is no need to submit a Promoting Interoperability Hardship Exception application.

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 2023 MIPS performance threshold remains at 75 points. This is the minimum final score needed to avoid a downward payment adjustment to Medicare Part B claims in 2025.

MIPS Bonus Points

The 2022 performance year was the last year for an additional performance threshold and/or additional MIPS adjustment for exceptional performance. There will be no option to gain bonus points for the 2023 performance year/2025 payment year.

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.

MIPS Rewards

CMS estimates that MIPS eligible clinicians who choose not to participate in MIPS lose an average 8.2 percent in Part B reimbursement. That amounts to a hefty sum when you consider an 8.2 percent 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 Quality Payment Program 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 subsequent years, CMS increased the program difficulty and raised reporting requirements. For 2020, this translated 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 7, 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 tip 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 data sets 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 percent 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 percent.

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 2023 and joins a group in 2024, the new group will inherit the clinician’s 2023 performance via his or her 2025 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 7 MIPS reporting requirement updates include:

MIPS APM participants can report the APM Performance Pathway (APP) as an individual, a group, or an APM entity. The CMS Web Interface continues to be a reporting option for Shared Savings Program ACOs reporting via the APP in performance years 2023 and 2024.

The APP is composed of a fixed set of measures for each MIPS performance category. The APP quality measure set for an individual, group, or APM entity consists of:

• The CAHPS for MIPS Survey measure;
• 2 administrative claims measures; and
• 3 eCQMs/MIPS CQM quality measures.

The APP quality measure set for Shared Savings Program ACOs consists of:

• CAHPS for MIPS Survey measure;
• 10 CMS Web Interface measures; and
• 2 administrative claims measures.

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.
• Review performance feedback reports 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.

2023 MIPS Data Submission

As in previous years, eligible clinicians can submit measures 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 (CPC^®) 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 six 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 clinicians or groups billing Part B through a common TIN may choose from the collection types in the table below:

Last Reviewed on Dec. 30, 2022, by AAPC Thought Leadership Team