With the repeal of the sustainable growth rate (SGR) behind us, we are

moving into a new era of Medicare physician payment under the Medicare
Access and CHIP Reauthorization Act (MACRA).
Here is what we know
MACRA realigns many Medicare program requirements
There will be two main pathways for physician payment under
MACRA:
Most physicians will begin being paid under MACRA via
the modified fee-for-service model called the Merit-based
Incentive Payment System (MIPS)
There is also an advanced alternative payment model
(APM) pathway, in which physicians participating in
payment models specifically approved by the Centers
for Medicare & Medicaid Services (CMS) can receive an
annual bonus payment
Participation in APMs that fall outside of the advanced models
approved by CMS will still help physicians in their performance
measurements under MIPS

Here is what you can do

1. Prepare your practice. There are steps you can take
now to prepare for the transition to MACRA next year, such
as participating in a qualified clinical data registry that
streamlines reporting processes. Use the checklist in this
action kit to get ready.
2. Stay up to date with MACRA and share preparation
tips with your colleagues. Learn more about MACRA in
documents provided in this action kit. Visit ama-assn.org/
go/medicarepayment to access additional resources and
information and to download a MACRA slideshow to use in
your own presentations. Sign up at ama-assn.org/go/email
to receive the latest news and resources on MACRA from the
AMA (if you have not already done so).

Here is what we are doing

The American Medical Association is continuing to work
with CMS as it shapes the final MACRA regulations, providing
physician feedback and emphasizing realistic approaches that
can reduce administrative burdens, improve quality of care and
promote better outcomes for patients. Throughout the summer
and fall, look to the AMA for new resources on MACRA as we
learn more about the regulations.

2016 American Medical Association. All rights reserved.

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The Centers for Medicare & Medicaid Services (CMS) has proposed regulations to implement the Medicare Access and CHIP
Reauthorization Act (MACRA). The proposal currently plans to begin performance measurement for both the Merit-based Incentive
Payment System (MIPS) and alternative payment models (APMs) on Jan. 1, 2017.
While these regulations are not yet final, taking steps now can help ease the transition for your practice and position you to earn
financial rewards for the high-value care you provide. Since some of the program requirements that have been proposed may change
in the final regulations, anticipated to be released later this year, be sure to watch for announcements and new educational material
from the American Medical Association and your specialty societies in the fall.

MACRA checklist: Steps you can take now

to prepare
Whether you ultimately participate in an APM or the MIPS,
taking action in the following areas can position your practice
for success in the future.
General considerations
Determine whether you have $10,000 or less in Medicare
charges and 100 or fewer Medicare patients annually. If so,
you are exempt from MIPS participation.
If you are not already participating in a patient clinical data
registry, contact your specialty society about participating in
theirsdata registries can streamline reporting and assist with
MIPS performance scoring.
Physicians in a practice of more than one eligible clinician
should decide whether to report individually or as a group.
Determine whether your practice meets the requirements for
small, rural or non-patient-facing physician accommodations.
MIPS: Quality measurement and reporting
Check your Medicare Physician Quality Reporting System
(PQRS) feedback reports. Make sure that you understand your
current quality metrics reporting requirements and how you
are scoring across both PQRS and private payers. While it is
anticipated that the general PQRS requirements will stay the
same under MIPS, there are some proposed changes to MIPS
quality requirements and quality measures. Determine which
quality measures you plan to report on; there are individual
measures and specialty-specific measure sets.
Access and review the 2014 annual PQRS feedback reports to
see where improvements can be made. Authorized representatives of group and solo practitioners can view the reports
on the CMS Enterprise Portal using an Enterprise Identity Data
Management account with the correct role.

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Consider whether you plan to report through claims, electronic health record (EHR), clinical registry, qualified clinical
data registry (QCDR) or group practice reporting option
(GPRO) Web-interface. The GPRO Web-interface is only
available for physicians in practices of 25 or more eligible
clinicians.
Seek out local support for your quality improvement activities.
Many local organizations such as Practice Transformation
Networks provide resources and technical supportoften
free of chargeto help small physician practices succeed.
MIPS: Resource use
Check your Medicare quality and resource use reports (QRURs)
to see where improvement can potentially be made.
Review CMSs proposed list of episode groups at cms.gov.
Identify your most costly patient population conditions
and diagnoses.
Identify targeted care delivery plans for these conditions.
Identify any internal workflow changes that can be made to
support care delivery plans.
Identify potential partners outside of your practice to advance
a coordinated care plan (e.g., other specialists to whom you
refer patients).
MIPS: Clinical practice improvement activities
Review the proposed rules list of clinical practice improvement
activities (CPIAs) to evaluate what activities your practice is
already doing and what adjustments it should make to
complete additional activities in 2017.
The reporting period for CPIAs is 90 days. Consider which
90 days in 2017 would work best for your practices
selected CPIAs.

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If you participate in a nationally recognized, accredited

patient-centered medical home (PCMH), a Medicaid medical
home model, a medical home model, or are recognized by the
National Committee for Quality Assurance as a patient-centered specialty model, ensure that your certifications and accreditations (as applicable) are current. Physicians participating
in these medical homes earn full CPIA credit.
MIPS: Advancing Care Information
If you have an EHR, make sure it is certified EHR technology,
which is often referred to as CEHRT. Determine whether it is
2014- or 2015-edition certified health information technology;
the version will determine the measures on which you report
in 2017.
Speak with your vendor about how their product supports
new payment model adoption. For example: How does their
product support Medicare quality reporting? Document these
conversations.
Consider how to ensure that you can report at least one
unique patient (or answer yes, as applicable) for each measure
of the base scores six objectives. Ideas include:

Conduct a careful security risk analysis in early 2017. Failure to

properly do so will result in a score of zero for this category.
Your risk analysis should comply with the HIPAA Security Rule
requirements. The AMA website has resources to help with this
step at ama-assn.org/go/hipaa.
Determine whether there is an additional public health registry
to which you can report to receive an additional point towards
your total Advancing Care Information score.
Alternative payment models
Confirm whether you are a participant in any of the advanced
APMs. If not, contact your specialty society or state medical
society to find out if there are APM opportunities for your
practice.
Evaluate whether you are likely to meet the threshold for
significant participation in an advanced APM, which would
qualify you for incentive payments.
Determine whether 50 percent of your clinicians use certified
EHR technology to document and communicate clinical care
information.

Reach out to existing patients to encourage their use of

patient portals to view, download and transmit their health
information in 2017.
Your EHR may allow you to send a secure message through
the patient portal to all of your patients at onceif so, and
doing so is appropriate for your practice, consider sending
an appointment reminder to all of your patients in 2017.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
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Rewards and penalties under MACRAs

Merit-based Incentive Payment System
Under the Medicare Access and Chip Reauthorization Act
(MACRA), physicians who remain in Medicares fee-for-service
program will be participants in the Merit-based Incentive
Payment System, or MIPS. While the American Medical
Association continues to press for improvements in the
regulatory framework for implementing MIPS, there is no
question that the system offers significant improvements over
previous Medicare law.
MIPS consolidates and better aligns the separate quality
and performance measurement programs that affected
physician payments previouslythe electronic health records
Meaningful Use program, the Physician Quality Reporting
System (PQRS) and the value-based modifier (VBM). It adds a
new component, clinical practice improvement activities, with
a menu of over 90 activities demonstrating high-value services
for which physicians can receive credit.

Under previous law, each of these separate programs included

quality measures that were overlapping and sometimes
conflicting. For example, a physician who did not successfully
report under PQRS automatically received a second negative
payment adjustment under the VBM. Under MIPS, that will no
longer be the case.
The previous Meaningful Use and PQRS programs also were
scored on a pass/fail approach, which required physicians to
be 100 percent successful on all reporting requirements in
order to avoid a payment penalty. Under MIPS, physicians will
receive partial credit for elements on which they are able to
report successfully.
Additionally, the aggregate financial risk of financial penalties
under MIPS is significantly less than it was under the previous
system as the table below illustrates.

Prior law

MACRA

Year

P4P penalties

Max combined
P4P penalties*

Max VBM
bonuses

Annual
updates

Max MIPS
penalties

Max MIPS
bonuses

Annual
updates

2017

MU -3%
PQRS -2%
VBM -4%

-9%

Unknown
(VBM)

Unknown

No change

No change

0.5%

2018

MU -4%
PQRS -2%
VBM -4% or more

-10% or more

Unknown
(VBM)

Unknown

No change

No change

0.5%

2019

MU -5%
PQRS -2%
VBM -4% or more

-11% or more

Unknown
(VBM)

Unknown

-4%

4% or more

0.5%

2020

MU -5%
PQRS -2%
VBM -4% or more

-11% or more

Unknown
(VBM)

Unknown

-5%

5% or more

0%

2021

MU -5%
PQRS -2%
VBM -4% or more

-11% or more

Unknown
(VBM)

Unknown

-7%

7% or more

0%

2022

MU -5%
PQRS -2%
VBM -4% or more

-11% or more

Unknown
(VBM)

Unknown

-9%

9% or more

0%

* The severity of penalties and size of potential bonuses under prior law is unknown because annual regulations pertaining to the VBM were no longer issued following MACRAs passage. However, Medicare law on the
VBM included no ceilings or floors; and in the first three years it was applied, CMS doubled the size of the potential cuts each year. Incentives for the MU and PQRS Medicare programs were no longer available in 2017.
Annual payment updates under the previous SGR system are also unknown since congressional intervention was required to stop cuts called for by the flawed formula.
Depending on budget neutrality calculations, MIPS bonuses may be as much as three times as high as the statutory percentage (e.g., 27 percent in 2022). Money is also available to provide 10 percent added bonuses
for exceptional performance.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
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Medicare Access and CHIP Reauthorization

Act proposed rule overview
The Medicare Access and CHIP Reauthorization Act of 2015
(MACRA) was passed by the U.S. House of Representatives on
March 26, 2015 (by a vote of 392 to 37), and the Senate on April
14, 2015 (by a vote of 92 to 8), and signed into law on April
16, 2015. This bipartisan legislation permanently repeals the
sustainable growth rate formula. Medicine strongly supported
this bill.
Currently, physicians participate in several overlapping Medicare
reporting programsthe electronic health records incentive
program (Meaningful Use or MU), the Physician Quality Reporting
System (PQRS) and the value-based modifier (VBM).
MACRA replaces these programs with the Merit-based Incentive
Payment System (MIPS), which consolidates and better aligns
these reporting programs to simplify them and reduce physicians
administrative burdens. It also adds a new clinical practice
improvement activities component with more than 90 activities
from which physicians can choose to receive credit for providing
high-value services. Physicians with annual Medicare billing
charges less than or equal to $10,000 who provide care for 100
or fewer Part B-enrolled Medicare beneficiaries (the low-volume
threshold) are exempt from MIPS.
Without the passage of MACRA, physicians could have been
subject to negative payment adjustments of 11 percent or more
in 2019 as a result of the MU, PQRS and VBM programs, with even
greater penalties in future years. In contrast, under MACRA, the
largest penalty a physician can experience in 2019 is 4 percent.
MACRA also provides incentives for physicians to develop
and participate in different models of health care delivery and
payment known as alternative payment models (APMs).
The Centers for Medicare & Medicaid Services (CMS) has released
its initial proposal to implement MACRA. This is a proposed rule.
Andy Slavitt, CMSs acting administrator, has clearly stated that
the administration is interested in the physician communitys
feedback so that the agency can make changes in the final
rule. The American Medical Association will continue to actively
engage the administration and Congress and work with the
federation as we seek to secure changes in the final rule.

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MIPS program structure

The following four components are scored individually and
then combined to create a composite score. Each physicians
score will result in a positive, negative or neutral payment
adjustment.
Quality performance50 percent of score in the first year
(replaces PQRS and some components of the VBM)
Resource use10 percent of score in the first year
(replaces the cost component of the VBM)
Clinical practice improvement activities15 percent of
score in the first year
Advancing Care Information25 percent of score in the
first year (replaces MU)
APMs
Qualifying physicians in advanced APMs are eligible for a
5 percent bonus and are exempt from MIPS.
MIPS APM participantsthat is, those APM participants
who do not qualify for the 5 percent bonuswill receive extra
credit in their MIPS scoring.
Overarching recommended modifications
Simplify MIPS to reduce reporting burden and improve chances
of success by creating more opportunities for partial credit and
fewer required measures.
Simplify and lower financial risk standards for advanced APMs.
Provide more flexibility for solo physicians and small group
practices, including raising the low-volume threshold to
exempt more physicians.
Amend the performance period. The proposed Jan. 1, 2017,
start date and full-year reporting period for the first MIPS and
APM performance periods, following CMS issuing the final rule
in the fall of 2016, does not provide sufficient time to prepare
physicians to have a successful launch of MACRA.
In order to assist with success, CMS needs to provide more
timely, accurate and actionable feedback. Physicians should
not go into a reporting period without knowing how they
performed in the prior performance period or the performance
benchmarks on which they will be measured.

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Clinical practice improvement activities

(CPIA)
Key improvements
Offers choice: The rule proposes to allow physicians to
select from a list of more than 90 activities from which to
receive credit under the Merit-based Incentive Performance
System (MIPS).
Activities that would count for CPIA include:
Completion of the American Medical Associations
STEPS Forward program
Hiring diabetes educators
Participation in a qualified clinical data registry,
also known as QCDR
Creates a shorter reporting period: Rather than requiring a
full year of reporting, CPIA activities would be performed for at
least 90 days during the performance period.
Promotes medical homes and alternative payment models:
A patient-centered medical home (PCMH) would receive
full CPIA credit if it is a nationally recognized accredited
PCMH, a Medicaid medical home model, a medical home
model or has a patient-centered specialty recognition from
the National Committee for Quality Assurance.
Participation in an alternative payment model would
receive half credit.

Recommended modifications
Expand high-weight activities. The proposed rule identifies
CPIA activities as either high or medium weight; however,
certain resource-intensive and high-quality activities are listed
as only medium weight. Given the time commitment, effort
and patient benefit associated with these activities, they should
be more appropriately categorized as high weight.
Reduce the number of required activities. Under the
proposed rule, physicians could be required to report on as
many as six different activities in order to receive the full CPIA
score. While the activities vary in required time and resources,
six different requirements add up and may become overly
burdensome. The AMA will recommend that a lower number
be used to fulfill the CPIA category in the final rule.
Weighting of CPIA in the composite score. For physicians
who are unable to report certain MIPS categories, the rule
primarily increases the impact of the quality score. Instead of
this approach, physicians should be able to choose to increase
the weight of the CPIA category since most will be able to find
relevant CPIA measures for their practice.

Provides accommodations for small, rural and non-patientfacing physicians: Under the proposal, these physicians would
need to meet a lower reporting threshold.
Proposes a simple reporting process: As proposed,
physicians will report CPIA activities generally through
attestation.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
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Quality category (replaces the Physician

Quality Reporting System)
Key improvements
Reduces reporting burden: Physicians report on six measures
rather than nine and no longer have to pick at least three
measures from the national quality strategy domains. Physicians
can also receive partial credit for reporting on a measure.

Further reduce the number of measures required. While

CMS reduces the number of measures required for satisfactory
reporting to six, the overall bar within the quality category
is still too high of an administrative burden and lacks focus.
Physicians must still report for the sake of reporting.

Offers flexibility: Allows physicians to:

Take into account differences in practice sizes, specialties

and availability of measures. To encourage the reporting on
outcome measures or cross-cutting measures, CMS should only
provide bonus points for reporting on these type of measures
instead of requiring that physicians report on them to achieve
the maximum quality score. Under the proposed quality
scoring methodology, physicians are at a disadvantage if there
are no outcome measures available to them.

Select individual measures or specialty specific

measure sets
Report through either claims, electronic health record
(EHR), clinical registry, qualified clinical data registry
(QCDR) or group practice reporting Web-interface
Report as either an individual or a group
Provides bonuses: Recognizing the cost to report through
electronic sources and the effort to report outcome measures,
the Centers for Medicare & Medicaid Services (CMS) provides
capped bonuses to physicians who choose to report quality
measures through an EHR, qualified registry, QCDR or Webinterface. Bonus points can also be earned for reporting on
additional outcome measures and measures in high-priority
areas, such as appropriate use, patient safety, efficiency, patient
experience or care coordination.
Recommended modifications

Eliminate administrative claims population health

measures. CMS proposes to use administrative claims
population health measures that were previously part of
the value-based modifier and developed for use at the
community level. The measures tend to have low statistical
reliability when applied at the individual physician level, and
at times, at the group level. Instead, CMS should make the
measures optional under the clinical practice improvement
activities component or exempt small practices from all of the
administrative claims quality measures.

Reduce the reporting thresholds. The proposed rule

increases the thresholds for reporting on quality measures
from 50 percent on Medicare Part B patients to 90 percent of
all patients through a registry, QCDR and EHR, or 80 percent of
Medicare Part B beneficiaries if reporting via claims. Instead of
keeping this threshold, the American Medical Association will
urge that CMS reduce the reporting burden by decreasing the
threshold to 50 percent to account for administrative issues.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
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Resource use category

(replaces value-based modifier)
Key improvements
Transitions to episode-based measures: The Centers for
Medicare & Medicaid Services (CMS) proposes to add 41
episode-based measures to account for differences among
specialties. Episode groups have the potential to more
appropriately measure resource use and provide more
actionable feedback than cost measures.
Recognizes the need for improved attribution: CMS plans
on making refinements to its attribution methodology
starting in 2018.
Recommended modifications
Eliminate the cost measures. Episode groups are a better
way to measure resources and, therefore, it is unnecessary to
maintain the Medicare spending per beneficiary (MSPB) and
total per capita cost measures that were developed for
hospital-level measurement.

Focus on methodological improvements. Making resource

use workable requires CMS to replace the current hospitalintended cost measures and focus on various methodological
improvements, including more sophisticated risk-adjustment,
more granular specialty comparison groups and attribution
methods that are relevant across specialties. Special effort
should be directed at eliminating flaws that have made
practices with the most high-risk patients more susceptible
to penalties than other physicians.
Increase required sample size. If CMS must maintain the
MSPB and total per capita cost measures, then it must increase
the sample sizes to ensure stronger statistical reliability and
reinstate the specialty adjustment.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
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Advancing Care Information

(replaces Meaningful Use)
Key improvements
New scoring: Moves away from a pass-fail program design by
combining a base score and performance score into an overall
Advancing Care Information (ACI) score.
The base score (worth 50 percent of the overall ACI score)
only requires attestation or simple yes/no options.
The performance score does not use thresholds and allows
physicians to receive partial credit on measures.
Physicians can also receive a bonus point for reporting to
multiple public health and clinical data registries.
Reduces measures: No longer requires physicians to report on
two measures that hindered usabilitycomputerized provider
order entry, known as CPOE, and clinical decision support,
known as CDS. Removes clinical quality measures to streamline
overall quality reporting in Merit-based Incentive Payment
System, or MIPS, and simplifies the public health and clinical
data registry reporting requirements.
Eased reporting processes: Allows group data submission
and performance to be assessed as a group (as opposed to the
individual clinician). Permits physicians to submit data for the
first time through qualified clinical data registries, known as
QCDRs.

Recommended modifications
Grant credit for each reported measure. The proposed rule
retains a pass-fail element in the base score. Instead of keeping
this approach, the American Medical Association is urging that
the Centers for Medicare & Medicaid Services (CMS) provide
credit for each measure reported, even when it is a simple yes/
no or attestation measure.
Take into account differences in practice sizes, resources
and experiences with health IT. Rather than judging all
physicians relative to one another, the performance scoring
should provide accommodations for different practices,
reducing the burden for small practices and those with less
experience. Additionally, CMS should take into account
improvement rather than just overall achievement on
measures.
Allow alternative ACI measures. Rather than keeping the
current Meaningful Use (MU) Stage 3 measures, CMS should
allow proposals for more relevant measures. This would ensure
that practices can select and use health IT tools in innovative
ways and not be limited by existing technology barriers. For
example, physicians should be able to propose additional ways
to engage with patients through technology.
Maintain exclusions. The final rule should maintain all existing
MU program exclusions, including for insufficient broadband
availability.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
2016 American Medical Association. All rights reserved.
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Alternative payment models (APMs)

Key improvements
Simplicity in quality requirements: The rule proposes that
advanced APMs, which are those that qualify physicians for the
5 percent lump-sum bonus payments, link somebut not all
payments to quality measures and allows significant flexibility
in choice of measures.

Financial risk should count physicians uncompensated

costs. The proposed rule only counts the risk of repaying
Medicare based on APM performance with no credit for
uncompensated costs physicians incur when delivering APM
patients care, such as the costs of care coordinators, educators,
non-face-to-face services and data analysis.

Flexible approach to electronic health records (EHR) use: In

the first performance year, advanced APMs must require at least
50 percent of participants to use certified EHR technology, with
use broadly defined, rising to 75 percent the following year.

Allow time for new APMs to be implemented and existing

APMs to be modified. Very few APMs qualify as advanced
APMs or MIPS APMs, which makes it impossible for most
physicians to meet the proposed January 2017 participation
deadline. The rule acknowledges that this start date means
physicians would need to be participating in an APM before
the final regulations are published that will define whether the
APM would qualify.

Several policies help physicians meet qualified participant

(QP) thresholds: Patient thresholds to meet the QP standard
are well below revenue thresholds in the Medicare Access and
CHIP Reauthorization Act, known as MACRA.
Advantages for the Merit-based Incentive Payment System
(MIPS) APM participants: Physicians participating in some
types of APMs, which do not meet criteria to be advanced
APMs, would benefit from modifications to MIPS components
likely to help them earn a high MIPS score.
Recommended modifications
Simplify more than nominal risk definition. With multiple
components that include total risk, marginal risk and minimum
loss rate, it would be difficult for physicians contemplating
participation in advanced APMs to understand their financial
risks and avoid losses.

Increase flexibility for medical homes. The proposed rule

allows medical homes to qualify as advanced APMs with more
realistic financial risk standards for physicians than other APMs,
but these criteria are limited to medical homes with fewer than
50 clinicians and those that focus on primary care, not specialty
care. The rules medical home risk and other requirements could
have unintended consequences for some existing primary care
medical homes, such as those serving vulnerable populations.

Required more than nominal risk should be less than

significant risk. The Department of Health and Human
Services definition of significant impact is a loss of 3 percent
of physician revenue. APMs more than nominal risk level should
be a percentage of physicians professional services revenue,
not total costs of care, as these include costs beyond
physicians control.

This outlines part of the Centers for Medicare & Medicaid Services proposed rule for the
Medicare Access and CHIP Reauthorization Act.
2016 American Medical Association. All rights reserved.
16-0384:6/16

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