On Friday, October 14, 2016, the Centers for Medicare and Medicaid Services (CMS) issued its Final Rule with Comment, implementing the Quality Payment Program (QPP) delineated in the Medicare Access and Chip Reauthorization Act of 2015 (MACRA). The QPP is designed to reward delivery of high-quality patient care through two programs: Advanced Alternative Payment Methods (Advanced APM) and the Merit-based Incentive Payment System (MIPS). The Rule establishes incentives to participate in Advanced APMs, as well as requirements for Qualifying Advanced APM Participants (QP) to receive additional incentive payments for reaching efficiency and care thresholds. Additionally, the Rule establishes the MIPS program that will make forward-looking payment adjustments for certain clinicians based on performance in four areas: cost, quality, advancing care information and improvement activities.
This Rule represents a major change in the way Medicare service providers report to CMS and receive their payments. However, CMS recognizes that change could not happen overnight, and that an adjustment period may be necessary. To this end, CMS is also implementing a two-year transition period allowing clinicians to gradually familiarize themselves with the new reporting structures in order to help as many clinicians as possible realize the full potential of the new programs.
The Quality Payment Program
The QPP is the program MACRA created to facilitate MIPS and Advanced APMs. CMS’s focus in implementing the QPP is to drive significant change in how care is delivered to make it more responsive to patients and their families, and to use the QPP to support physicians in improving the health of their patients. The QPP’s main goals are to:

  • Improve care by focusing on outcomes for patients, decrease provider burden, while preserving independent clinical practice
  • Promote the Advanced APMs that bring together healthcare stakeholders in determining incentives
  • Advance existing efforts of delivery system reform

The QPP’s two avenues for achieving its goals, Advanced APMs and MIPS, were created in order to allow clinicians and physicians to deliver coordinated and high-quality care in a streamlined payment system and to improve the quality of patient care.
Advanced Alternative Payment Models (Advanced APM)
An Advanced APM is a payment approach designed to contribute to better care and smarter spending by CMS through providing added incentives to high-quality and cost-efficient care. The approaches used in Advanced APMs are developed in partnership with clinicians and physicians, and designed to evolve to ensure beneficiaries continuously receive the highest quality of care. CMS is currently developing the initial set of Advanced APM determinations to be released no later than January 1, 2017. One example of a current Advanced APM is an accountable care organization set up under the Medicare Shared Savings Program.[1]
Merit-Based Incentive Payment System (MIPS)
MIPS is a new program for Medicare-enrolled practitioners that requires that MIPS-eligible clinicians report data on specific measures each year to set performance standards and incentive payments. It is a combination of three existing programs: the Physician Quality Reporting System, the Physician Value-based Payment Modifier, and the Medicare Electronic Health Record Incentive Program for Eligible Professionals. Even though MACRA and the Rule will sunset these three programs, MIPS will keep the focus on quality, cost, and the use of CEHRT in a way that avoids redundancies.
The Rule finalizes the measures, activities, reporting and data submission standards that CMS uses to measure four performance categories. In these performance categories, clinicians must report on a specified number of measures to be eligible to receive the highest possible final scores and fully participate in MIPS.
Transition Period
CMS plans to phase in the reporting provisions in the Rule and provide continuing education and resources to helping clinicians understand the new programs and comply. During the 2017 transition year, CMS will allow clinicians to choose from one of three flexible reporting options to submit data to MIPS and a fourth option to join an Advanced APM. Clinicians may be eligible for upward adjustment payments even if the clinician does not fully participate during this transition year.
If the clinician is ready to start to fully participate in MIPS, clinicians use the MIPS reporting guidelines above. CMS recognizes that not all clinicians and practices will be eligible to participate in an Advanced APM or in MIPS because of the size of the practice or the volume of Medicare beneficiaries or payments it receives. CMS does anticipate, however, that small and rural practices will participate in MIPS at similar rates to larger practices, and that 90% of all MIPS-eligible clinicians will receive either a positive or neutral MIPS payment adjustment in the transition year. To this end, CMS will dedicate US$100 million in technical assistance to eligible clinicians in small and rural practices to help them participate and weather the changes in reporting that these new programs will bring.
[1] 42 U.S.C. § 1395l(z)(3)(C)(ii).