United States: CMS Releases MACRA Final Rule, Easing 2017 Reporting Requirements

On October 14, 2016, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The final rule marks the most significant reform to our health care system since the enactment of the Affordable Care Act in 2010, providing Medicare incentives to reward quality and value—not volume—through the use of alternative payment models such as accountable care organizations. The final rule includes changes that significantly soften certain requirements from the proposed rule, with CMS emphasizing that physicians will be allowed to "pick their pace" for satisfying MACRA requirements that begin on January 1, 2017.

A MACRA Refresher

CMS issued a proposed rule in late April of this year, much of which is unchanged in the final rule. For our previous discussion of MACRA, see our prior blog posts on: an overview of the MACRA and MIPS, Advancing Care Information, APMs, and flexible reporting requirements.

Starting in 2019, CMS will replace a number of existing reporting programs with a two track system, known as the Quality Payment Program, under which eligible clinicians will receive incentive reimbursement payments through either:

  1. The Merit-Based Incentive Payment Systems (MIPS); or
  2. Alternative payment models (APMs).

MIPS consolidates three existing Medicare programs: (1) the Physician Quality Reporting System, (2) the Physician Value-based Payment Modifier, and the (3) Medicare Electronic Health Record (EHR) Incentive Program. Under MIPS, eligible clinicians can receive incentive payment (or penalty) based on four categories of measures: quality, cost, improvement activities, and the use of EHRs. (These categories are discussed in greater detail below.) CMS will take the results and create a composite score that it will then use to increase or decrease the clinician's reimbursement under the Medicare Physician Fee Schedule (PFS). These adjustments will begin on January 1, 2019, and will be based on data collected in 2017. Clinicians scoring below a certain threshold will incur a negative adjustment in their payments starting with a maximum penalty of 4% in 2019 and increasing to a maximum penalty of 9% in 2022 and beyond. Those scoring above the threshold can receive up to a 4% increase in 2019, with a maximum increase of 9% in 2022. High achievers will be eligible for an additional upward adjustment.

The second track is for clinicians participating in an "Advanced APM," including certain accountable care organizations (ACOs) and patient-centered medical homes. Advanced APMs essentially operate as more generous incentive programs that are exempt from the MIPS requirements. Those on the Advanced APM track can earn bonuses of up to 5% of their PFS payments in 2019. However, as discussed in further detail below, only ACOs accepting some amount of downside financial risk can qualify for the MIPS exemption.

The Final Rule

The Merit-Based Incentive Payment System (MIPS)

In response to numerous comments expressing deep concern over the timetable for reporting under MIPS, CMS is making the 2017 performance year a "transition year" with reduced reporting requirements, focusing on a goal of widespread participation and clinician education. We focus our discussion on this first transition year because of CMS's emphasis on providing flexibility for the beginning of the program. Only physicians who fail to report a minimum amount of data (discussed below) will receive the 4% negative adjustment in 2019. Those looking to avoid the negative adjustment under MIPS have three options:

  1. Full Reporting. Report all of the required measures for a minimum of a continuous 90-day period. Clinicians using this option will be eligible to receive a moderate positive payment adjustment depending on their score.
  2. Partial Reporting. Report on one "quality measure," more than one "improvement activity," or more than the required measures in the "advancing care information performance category," for a minimum of a continuous 90-day period. Clinicians using this option will receive either no adjustment or a small positive payment adjustment depending on their score.
  3. Minimum Submission. Report on one quality measure, one activity in the improvement activities category, or report the required measures of the advancing care information category. This option does not require continuous reporting for a 90-day period. Clinicians using this option will not be eligible to receive a performance bonus, but will not be subject to a penalty.

Under the final rule, performance data can be collected starting on January 1, 2017. If clinicians need more time, they can delay collecting the data until no later than October 2, 2017, which is the first business day of the 4th quarter of 2017. However, CMS has stated that clinicians seeking to maximize their chances of qualifying for a positive adjustment should report as much data for 2017 as possible. The final rule has set a deadline of March 31, 2018, to report data to CMS regardless of the amount of data being reported. Clinicians can submit data either individually or through a group. The final rule also allows smaller practices to form "virtual groups" of up to ten clinicians for the purposes of reporting. Unfortunately, the virtual group option will not be available in 2017.

The calculation of the amount of the payment adjustment is based on a composite performance score in the following performance categories (scoring weights for 2017 are noted parenthetically):

  1. Clinical quality (60%). Performance is calculated based on the submission of quality measures chosen by the clinician. (The measures available to clinicians will be updated annually through a call for quality measures process.) Clinicians have the option of submitting general quality measures or specialty-specific quality measures.
  2. Advanced care information (25%). Performance is calculated based on the submission of five EHR use-related measures (six fewer required measures than in the proposed rule). These measures include: security risk analysis; e-prescribing; providing patient access; sending summaries of care; and requesting/accepting summaries of care. Importantly, the final rule eliminates the all-or-nothing approach to reporting under the proposed rule. CMS also allows optional measures to be submitted for a higher score.
  3. Clinical Improvement Activities (15%). Performance is calculated based on the clinician's attestation to having completed four clinical practice improvement activities. (This is a reduction from the six activities under the proposed rule.) Bonus scores are available for clinical improvement activities that use certified electronic health record technology (CEHRT) and for reporting to public health and clinical data registries. This is a new category and does not replace an existing program.
  4. Cost (0%). Performance under this category (referred to in the proposed rule as "resource utilization") will be calculated based on cost measures specified by CMS. Clinicians do not have to report data for this category—it is calculated independently by CMS. To address public comments, this category will not be factored into the performance scores for the first payment year 2019.

CMS also finalized the criteria that will be used to exempt low-volume Medicare providers from MIPS. Under the final rule, MIPS will not apply to practices with less than $30,000 in Medicare charges or fewer than 100 unique Medicare patients per year. The threshold was originally $10,000 in the proposed rule.

Advanced Alternative Payment Models (Advanced APMs)

Clinicians are exempt from MIPS and eligible for up to a five percent bonus payment if they receive a sufficient portion of their payments or see a sufficient portion of their patients through an Advanced APM. These clinicians are referred to as Qualified APM Participants or "QPs."

APMs seeking to qualify as an Advanced APM must meet what CMS describes as "ambitious but achievable goals," including:

  1. The use of certified EHR technology;
  2. Payment for covered professional services based on quality measures comparable to those in MIPS' quality performance category; and
  3. Either (a) the bearing of downside financial risk in excess of a nominal amount or (b) being a nationally recognized accredited patient-centered medical home, expanded under section 1115A(c) of the Social Security Act.

In an attempt to increase the number of Advanced APMs and make them more palatable to providers, the final rule reduces the nominal amount of financial risk for 2017 and 2018 to eight percent of all Medicare reimbursement or three percent of the expected expenditures for which the clinician is responsible under the APM.

CMS anticipates that the following will be Advanced APMs for the 2017 performance year:

  1. The Comprehensive ESRD Care – Two-sided risk;
  2. Comprehensive Primary Care Plus (CPC+);
  3. Next Generation ACOs; and
  4. Medicare Shared Savings Program – Tracks 2 and 3.

In a further attempt to increase the number of Advanced APMs, CMS announced in the final rule that it will explore the development of a new ACO model to begin in 2018. This new model, referred to as ACO Track 1+, will allow those currently participating in Medicare Shared Savings Program Track 1 ACOs to take on enough downside risk to qualify as an Advanced APM. CMS also predicts the creation of additional models.

CMS acknowledges that some clinicians will participate in APMs that are not considered Advanced APMs. Clinicians in these APMs are subject to MIPS' reporting requirements and payment adjustments. However, CMS is providing some relief to physicians in these APMs—which CMS confusingly refers to as MIPS APMs—by scoring their performance using the APM scoring standard instead of the applicable MIPS standards.


Although initial indicators suggest that health care industry provider groups are pleased with the flexibility CMS is trying to achieve in the transition year, the Quality Payment Program reform under MACRA will require a significant amount of provider resources to implement. CMS believes, based on PQRS in 2015 reporting, that a substantial number of solo and small practices will be able to successfully input data in the new system. Notwithstanding this optimism, CMS is dedicating $20 million per year for the next five years to provide small practices with technical assistance on MIPS and advice on their potential transition to Advanced APMs. Whether enough practices will actually transition to Advanced APMS—which is MACRA's overriding goal after all—is one of the most difficult questions facing CMS. It is likely these MACRA changes will also further drive the consolidation of small group practices to be able to better position themselves to receive the incentive payments under the Quality Payment Program.

One area where clinicians will soon find relief is the transition away from the widely criticized Meaningful Use Program which ends with the implementation of the MACRA incentive payments in 2019. Instead, physicians will be reported more simplified advanced care information data under MIPS.

It is clear CMS went out of its way to make it relatively easy for practitioners to avoid a negative payment adjustment, and for many practitioners to submit a simplified set of data and thereby earn some limited positive payment adjustment. However, this accommodation is only temporary. Whether a one-year transition period will be sufficient remains to be seen. What is certain is that a successful transition to MIPS with wide participation is essential for the program given the large number of clinicians that will be participating on the MIPS track.

CMS understands that widespread clinician participation in Advanced APMs is unlikely, estimating a participation rate in the transition year of only 70,000 and 120,000 clinicians. CMS is clearly interested in encouraging clinician participation in APMs, as evidenced by the planned introduction of the ACO Track 1+ model.

This MACRA final rule is the start of a long journey in Medicare fee-for-service payment reform, brought about by rare bipartisan Congressional compromise legislation based on the common understanding that for Medicare to achieve long-term sustainability, volume-based incentives need to be replaced with rewards for quality and patient-centered care. To come in future years are more rigorous targets, including scoring for cost performance, with CMS actually providing clinical feedback to clinicians on their reported performance.

CMS will be accepting feedback on the final rule for 60 days after the rule is published.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Matthew Cohen
Thomas S. Crane
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.