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CMS locks in January 1, 2017 start date in final rule on new Medicare payment tracks under MACRA

The Centers for Medicare and Medicaid Services (CMS), on Friday, October 14, 2016, issued the heavily anticipated final rule on the Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Together, CMS is referring to the new payment tracks through MIPS and Advanced APMs as the Quality Payment Program (QPP).

MACRA repealed the sustainable growth rate (SGR) formula for updates to the Medicare Physician Fee Schedule and sets payment updates for all years in the future. Through the QPP, the law is intended to link Medicare payment updates to quality and performance and drive the health care payment system across all payers away from fee-for-service reimbursement models.

The first performance period under MACRA will begin on January 1, 2017, and the first payment adjustments under the law will take effect for 2019.

Notably, CMS issued the final rule with a comment period as part of an effort to take a staged approach to implementation of the QPP that is intended to evolve over time. The agency will accept public comments for 60 days once the final rule is posted for Public Inspection on the Federal Register.

Highlights of key provisions of the final rule with comment period are provided below.


The final rule provides important details for the greater flexibility to MIPS participation that CMS outlined last month and makes some changes intended to help smaller practices participate.

The final rule sets the MIPS performance threshold at three points, meaning that clinicians who report at least one measure in the Quality performance category, one activity in the Clinical Practice Improvement Activities performance category; or report the required measures of the Advancing Care Information performance category will not get a negative payment adjustment. This reflects CMS’s policy that only clinicians who do not report at all under MIPS for the 2017 performance period will be subject to negative payment adjustments for 2019. In fact, clinicians who do not report will receive the maximum negative payment adjustment of 4% for 2019.

The final rule explains that clinicians who submit 90 days of 2017 performance data to CMS will receive a neutral or small positive payment adjustment, while clinicians who submit a full year of 2017 performance data to CMS may earn a moderate positive payment adjustment.

Future years of the program will require longer performance periods and higher performance in order to avoid a negative MIPS payment adjustment.

Clinicians who receive a MIPS Composite Performance Score (CPS) of 70 or higher (on a scale of 0 to 100) will be eligible for an additional payment adjustment for exceptional performance.

Notably, the final rule weights Resource Use at 0% for the 2017 performance period – this measure of costs will not be taken into account for the first year of MIPS and will not affect payment adjustments for 2019. As a result, Quality will account for 60% of the CPS score for 2019, while Clinical Practice Improvement Activities will account for 15% and Advancing Care Information will account for 25%.

The weight of the Resource Use performance category will gradually increase to 30% by performance year 2019 (for payment adjustments in 2021) as required by the statute.

The final rule also provided greater flexibility for clinicians in the Advancing Care Information performance category. Clinicians will need to fulfill five required measures for a minimum of 90 days to receive a score of 50%. Reporting on optional measures would allow a clinician to earn a higher score. The proposed rule had called for clinicians to report on 11 required measures.

In response to concerns from members of Congress and health care stakeholders, CMS also raised the low-volume threshold for MIPS participation. Clinicians who do not have at least $30,000 in Medicare Part B charges in a year and treat at least 100 Medicare beneficiaries will be excluded from MIPS. The proposed rule had suggested setting the threshold for Medicare Part B charges at $10,000 for a year.

Based on the policies in the final rule, CMS estimates that between approximately 592,000 and 642,000 clinicians will participate in MIPS in the 2017 transition year. CMS estimates that 2019 payment adjustments will be approximately evenly distributed between $199 million in negative payment adjustments and $199 million in positive payment adjustments.

Advanced APMs

Importantly, CMS finalized the key components of the Advanced APM Incentive track without changes from what was put forward in the proposed rule. For example, the final rule retains the 4% total risk threshold for Advanced APMs, as well as the patient count thresholds included in the proposed rule.

Although CMS has provided a list of APMs it anticipates will be Advanced APMs for 2017, the agency will provide a final list of advanced APMs by January 1, 2017.

CMS is eager to provide additional options for clinicians to participate in advanced APMs and is weighing changes to existing programs. For example, the agency has raised the possibility of changes to the Medicare Shared Savings Program (MSSP) Track 1 ACO that would permit participants to begin sharing limited downside risk and potentially qualify as an advanced APM beginning in 2018. This option — called Medicare ACO Track 1+ — may be attractive to organizations currently participating in MSSP Track 1 or entering MSSP for the first time. Greater detail will be provided in future rulemaking.

The final rule also explains that CMS will use an accelerated timeline for making Qualifying Participants (QP) determinations. The policy is intended to use “snapshots” at various points in time of the performance year so that clinicians will know their QP status in advance of the end of the MIPS performance period so they will know whether they will need to submit performance data to CMS for purposes of MIPS.

In addition, the rule finalizes criteria that the Physician-focused Payment Technical Advisory Committee (PTAC) will use to make recommendations to CMS on new payment models that will be submitted by the public. The PTAC has been accepting non-binding letters of intent for proposals for new payment models and hopes to begin accepting formal proposals by December 1, 2016.

Based on the policies in the final rule, CMS estimates that approximately 70,000 to 120,000 clinicians will become QPs based on their participation in Advanced APMs in 2017. CMS expects approximately 125,000 to 250,000 clinicians to be QPs in the 2018 performance year. CMS estimates that APM Incentive Payments in calendar year 2019 will total between $333 million and $571 million.

For more on MACRA and the timeline for implementation, visit Deloitte.com.

This article was originally published on Reg Pulse Blog, Deloitte’s Center for Regulatory Strategy blog. 

Author bio

Anne Phelps is the US Health Care Regulatory Leader and a Principal with Deloitte & Touche LLP. She has over twenty-five years of health care policy experience having worked in federal agencies, the US Senate, the White House, and in consulting firms. She serves as a strategic business advisor to numerous health care stakeholders – including providers, health plans, employers, and life sciences companies – helping them navigate the complex health care regulatory environment and how it will impact their organizations.