United States: MACRA Final Rule Released: CMS Gives An Abundance Of Flexibility In Transition To Keep Providers In The Game

In a rare example of bipartisanship in health care policy, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) was passed by Congress and signed into law on April 16, 2015. Members of Congress from both parties came together to permanently replace the inherently flawed Medicare sustainable growth rate (SGR) methodology that had been used for nearly two decades to update the physician fee schedule with a payment system that incorporates coordinated and cohesive quality metrics. In passing MACRA, Congress reinforced Medicare's trajectory toward value-based payment with the Quality Payment Program (QPP), a departure from the status quo of volume-based reimbursement.

On Friday, October 14, 2016, the Centers for Medicare & Medicaid Services (CMS) published a final rule with comment period implementing MACRA's new QPP that offers clinicians two ways to be rewarded for delivering high-quality patient care: 1) join an advanced alternative payment model (Advanced APM), which will offer incentives for participating in innovative reimbursement models; or 2) join the Merit-Based Incentive Payment System (MIPS), which will provide a performance-based payment adjustment based on physicians' reporting.

Changes from Proposed Rule

On April 27, 2016, CMS released a Proposed Rule to establish physician incentives for participation in certain APMs and MIPS. In response to over 4,000 comments and feedback received in outreach sessions with over 100,000 stakeholders, CMS made several significant changes to the Proposed Rule when promulgating the Final Rule, which increases flexibility for MIPS participation by creating several go-at-your-own-pace options for clinicians to choose in the initial years of the program. It also adjusts the MIPS low-volume threshold. CMS has set 2017 as a transition year meant  to encourage clinician participation and prioritize education opportunities. To accomplish this, the Final Rule gives participating clinicians three paths to choose from within MIPS, including options with minimal reporting requirements that would allow clinicians to avoid negative payment adjustments. The rule also states that it anticipates this flexibility will extend into 2018, with an additional rule to be published in 2017.

In order to increase the potential for clinicians to participate in Advanced APMs, the Final Rule also allows for at least one new potential Advanced APM option, Medicare Shared Savings Program (MSSP) ACO Track 1+. It outlines the new Track 1+ option that is available to existing and new MSSP ACOs alike. This option will allow additional MSSP ACO models to participate in the QPP as an Advanced APM. In addition, it simplifies the "all-or-nothing" requirements for the use of certified electronic health record technology (CEHRT), establishes standards for the Medical Home Model and provides additional flexibility for small and independent practices.

Advanced APMs

The Final Rule establishes incentives for clinicians to participate in two types of Advanced APMs: Advanced APMs and Other Payer Advanced APMs. In order to qualify as an Advanced APM, the APM must: 1) require participants to use CEHRT; 2) provide payment for services based on comparable quality measures as required under MIPS; and 3) require participants bear more than nominal risk for financial losses or be a Medical Home Model. To qualify as an Other Payer Advanced APM, the APM must meet the same first two requirements as above as well as require that participants either bear more than nominal financial risk if actual expenditures exceed expected expenditures or be a Medicaid Medical Home Model.

Further, the Final Rule provides that CMS will publish determinations as to qualifying APM participants no later than January 1, 2017, so that clinicians will know whether they are excluded from MIPS before they have to submit required information to participate in MIPS. CMS estimates that the number of qualifying APM participants in 2017 will range from 70,000 to 120,000, which will grow to between 125,000 and 250,000 in 2018. CMS further estimates that qualifying APM participants will receive between $333 million and $571 million in APM incentive payments.


MIPS is a new program for eligible clinicians who participate in Medicare, defined as physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered anesthetists and others who bill under Medicare Part B. It establishes a new quality-based payment framework built from evidence-based and specialty specific measures in combination with practical office-based improvement activities as established by Congress. Specifically, MIPS consolidates three existing programs: the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM) and the Medicare Electronic Health Record (EHR) Incentive Program in order to create a coordinated, quality-based program without redundancies. The Final Rule sunsets the payment incentives currently provided under all three of these programs as of calendar year 2018.

At the core of the MIPS program is the ability to make payment adjustments based on clinicians' performance on quality, improvement activities, advancing care information and cost performance metrics. For the 2017 transition year, only three of the categories will be in effect: (1) quality; (2) improvement activities; and (3) advancing care information. The cost performance category has been weighted at zero percent for 2017.

In order to "fully participate" in 2017 and qualify for the highest possible final scores, clinicians must report on the following metrics:

  1. Quality: Quality measures will be selected through an annual process and published in the Federal Register by November 1 of each year. Clinicians then must report on six quality measures or, alternatively, one specialty or subspecialty-specific set of quality measures.

  2. Improvement Activities: Performance will be measured with relative weight on activities that focus on healthcare delivery improvements including coordination of care, engaging beneficiaries and population health management. The Proposed Rule would have required reporting six medium-weighted or three high-weighted activities. The Final Rule reduces the requirement to four medium-weighted or two high-weighted activities for full participation in 2017. Small and rural providers are required to report only two medium-weighted or one high-weighted activity. 

  3. Advancing Care Information: Performance will be measured on activities that incorporate the secure exchange of health information and the use of CEHRT to increase care quality and patient engagement.  The Final Rule reduces the reporting requirement from eleven measures to five, and makes all other measures optional. Reporting additional measures can, however, help clinicians achieve a higher score. In addition, CMS will award a bonus for any activities that use CEHRT to report to public health or clinical data registries.

  4. Cost performance: While this category will not affect clinicians' payment adjustments in 2017, CMS does intend to calculate performance on certain cost measures in order to provide feedback to clinicians. These calculations include total per capita costs for all attributed beneficiaries as well as a Medicare spending per beneficiary (MSPB) measure. 

The Final Rule estimates that the number of eligible clinicians who will be required to participate in MIPS in 2017 will range from 592,000 to 642,000. CMS assumes with a 90 percent participation rate by clinicians that the payment adjustments will be equally divided between negative and positive payment adjustment, ensuring budget neutrality. In addition, clinicians who receive a final score of 70 or higher will be eligible for the exception performance adjustment from a funding pool of $500 million.

Transitional year: 2017 (and most likely 2018, too)

CMS finalized a "transitional year" for calendar year 2017 that will allow health care clinicians to choose how to participate for 2017. The performance threshold that clinicians must meet in 2017 has been lowered to three points. The 2017 performance year will determine health care clinicians' payment adjustments in 2019.

There are four ways in which a clinician can avoid a negative payment adjustment in the 2017 transition year:

  1. Report to MIPS for a full 90-day period, or up to the full performance year, in all categories with full participation, which allows clinicians to maximize the potential for a positive payment adjustment. CMS considers "full participation" to be when a clinician submits all required information in all three performance categories: quality, improvement activities and advancing care information. Full participation for the quality performance category requires reporting on six quality measures or one specialty- or subspecialty-specific measure set; for improvement activities performance requires reporting on up to four activities; and for advancing care information performance requires reporting on five required metrics. In 2017, the cost performance category will have a weight of zero.

  2. Report to MIPS for at least a full 90-day period, and report more than one quality measure, more than one improvement activity, or more than the required measures in the advancing  care information performance category. This will ensure providers avoid a negative payment adjustment, but can also possibly make them eligible for a positive payment adjustment.

  3. Report one measure in quality, one activity in improvement activities, or report the required measures of advancing care information to ensure the clinician avoids a negative payment adjustment. MIPS eligible clinicians who choose not to report will receive the full negative four percent adjustment.

  4. Participate in an Advanced APM that meets the threshold of sufficient Medicare payments received through the Advanced APM or sufficient number of Medicare patients through the Advanced APM. Participation in an Advanced APM qualifies the clinician for a potential five percent bonus incentive payment.

CMS believes the staged approach laid out in the Final Rule will allow them to continue to develop policies that can both be practically implemented within the capacities and capabilities of the current system while continuing the drive towards patient-centered and quality-driven health care. Stakeholders reviewing the Final Rule are asked to continue to submit comments and feedback to CMS which is asking for the iterative process to continue through the early years of the program.

The Dentons team will continue to monitor CMS's implementation of MACRA, as well as any congressional action that may impact its enactment. 

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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.

Events from this Firm
24 Oct 2017, Seminar, Washington, DC, United States

The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

27 Oct 2017, Seminar, New York, United States

Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

1 Nov 2017, Seminar, Washington, DC, United States

Celebrate the 58th anniversary of Dentons' Government Contracts practice

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.