1. Schaum, Kathleen D. MS

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October 14, 2016, is a date that will be remembered for years! On that date, the Department of Health & Human Services released the Final Rule about a landmark new payment system for certain clinicians who participate in the Medicare program. The detailed regulation is more than 2000 pages long. Therefore, this article will review the questions of who, what, why, when, and how much that all Medicare-participating clinicians will first want to know. Future Payment Strategies articles will discuss further implications of the new payment system.



The Merit-Based Incentive Payment System (MIPS) pertains to the following MIPS-eligible clinicians if they bill Medicare for more than $30,000 a year, if they provide care for more than 100 Medicare patients a year, and are a


* physician


* physician assistant


* nurse practitioner


* clinical nurse specialist


* certified registered nurse anesthetist


* a group that includes these clinicians who bill under Medicare Part B



Note: Specific Medicare-enrolled clinicians will be excluded from MIPS: newly Medicare-enrolled MIPS-eligible clinicians, successful participants in Qualifying Advanced Alternative Payment Models (APM), and clinicians who do not meet the low-volume threshold for treating Medicare patients or receiving Medicare payments (bills <$30,000 in Medicare allowed charges or sees <100 Medicare Part B beneficiaries in a given year). Refer to the Final Rule for details about the excluded clinicians.



The new Medicare payment program is called the Quality Payment Program. It will provide new tools and resources to help Medicare-participating clinicians focus on care quality and making patients healthier. The Quality Payment Program will evolve over multiple years as technology infrastructure, physician support systems, and clinical practices change over the next few years.


The early years of the program will lay the groundwork for expansion toward an innovative, outcome-focused, patient-centered, resource-effective health system. The strategic objectives of the Quality Payment Program are to


1. improve beneficiary outcomes and engage patients through patient-centered Advanced APM and MIPS policies;


2. enhance clinician experience through flexible and transparent program design and interactions with easy-to-use program tools;


3. increase the availability and adoption of robust Advanced APMs;


4. promote program understanding and maximize participation through customized communication, education, outreach, and support that meet the needs of the diversity of clinician practices and patients, especially the unique needs of small practices;


5. improve data and information sharing to provide accurate, timely, and actionable feedback to clinicians and other stakeholders; and


6. ensure operational excellence in program implementation and ongoing development.



The Quality Payment Program provides options to report (1) as an individual MIPS-eligible clinician or (2) as part of a group. Some data may be submitted via relevant third-party intermediaries, for example, qualified clinical data registries (QCDR), health information technology vendors or electronic health record (EHR) vendors, qualified registries, and Centers for Medicare & Medicaid Services (CMS)-approved survey vendors.



For 13 years, the Sustainable Growth Rate formula threatened clinicians participating in Medicare with huge payment decreases. The Medicare Access and CHIP Reauthorization Act of 2015 was enacted on April 16, 2015, and repealed the outdated Medicare Sustainable Growth Rate methodology for updates to the Physician Fee Schedule and replaced it with a new approach to payment (1) that rewards the delivery of high-quality care and patient outcomes while minimizing burden on eligible clinicians and (2) that is flexible, highly transparent, and improves over time with input from clinical practices. The new payment system aligns with the nation's Triple Aim goals of achieving a patient-centered healthcare system that delivers better care, smarter spending, and healthier people and communities.


Based on their practice size, specialty, location, or patient population, eligible Medicare-participating clinicians or groups can choose 1 of 2 interrelated Quality Payment Program pathways:


1. Advanced APMs or


2. Merit-Based Incentive Payment System.



The MIPS will make payment adjustments based on performance of quality (a set of evidence-based, specialty-specific standards as well as practice-based improvement activities), cost, and use of certified EHR technology (CEHRT) to support interoperability and advanced quality objectives in a single, cohesive program, which avoids redundancies that will consolidate components of 3 existing programs:


1. Physician Quality Reporting System


2. Physician Value-Based Payment Modifier


3. Medicare EHR Incentive Program



Many features of the MIPS are intended to simplify and integrate further during the second and third years.


Advanced APMs are payment approaches, developed in partnership with the clinician community, which provide added incentives to deliver high-quality and cost-efficient care. Advanced APMs can apply to a specific clinical condition, a care episode, or a population. The Quality Payment Program will recognize 2 types of Advanced APMs:


1. Advanced APMs



To participate in the Quality Payment Program, the Advanced APMs must meet 3 criteria:


a. The APM must require participants to use CEHRT-at least 50% of the Qualifying APM Participants must use CEHRTs.


b. The APM must provide payment for covered professional services based on quality measures comparable to those in the quality performance category under MIPS.


c. The APM must require the participating APM entities to either be a Medical Home Model expanded under section 115A(c) of the Social Security Act, or bear risk of monetary losses of more than a nominal amount under the APM.


2. Other Payer Advanced APMs



These payment arrangements with a payer (eg, Medicaid, Medicare Advantage, or commercial payer) can begin for the 2021 performance period and must meet 3 criteria:


a. Payment arrangement must require participant to use CEHRT.


b. Payment arrangement must provide for payment for covered professional services based on quality measures comparable to those in the quality performance category under MIPS.


c. Payment arrangement must require participants to either bear more than nominal financial risk if actual aggregate expenditures exceed expected aggregate expenditures, or be a Medicaid Medical Home Model that meets criteria comparable to Medical Home Model expanded under section 1115A(c) of the Social Security Act.




The first performance period of the Quality Payment Program opens on January 1, 2017, and closes on December 31, 2017. Given the wide diversity of clinical practices, eligible clinicians are allowed to pick their pace of participation for the first performance period that begins January 1, 2017. They will have 4 flexible options to submit/not submit performance data to MIPS and another option to join Advanced APMs in order to become Qualifying APM Participants.


If the clinicians select the MIPS track, they should record and report their performance data throughout 2017. Regardless of when clinicians opt to start their MIPS participation in 2017, they must submit their 2017 performance data by March 31, 2018, to potentially earn a positive payment adjustment on January 1, 2019.


If the clinicians select the Advanced APM pathway, they should submit their quality data through their Advanced APM.



The MIPS pathway is designed for clinicians in traditional fee-for-service Medicare. The Quality Payment Program finalizes measures, activities, reporting, and data submission standards across 4 integrated performance categories that support care improvement:


1. quality


2. cost


3. improvement activities


4. advancing care information



These MIPS participating clinicians have 4 participation options. See the Table for an overview of the MIPS reporting requirements.

Table. OVERVIEW OF M... - Click to enlarge in new windowTable. OVERVIEW OF MIPS REPORTING REQUIREMENTS

1. MIPS Option 1: If Medicare-participating clinicians are ready, they can start collecting performance data on January 1, 2017.



Note: This start date will provide the greatest opportunity for a moderate positive MIPS performance payment adjustment on January 1, 2019.


2. MIPS Option 2: If Medicare-participating clinicians are not ready on January 1, they can choose to start anytime between January 1, 2017, and October 2, 2017. In this case, they must report a minimum of 90 continuous days and must report more than 1 quality measure, more than 1 clinical practice improvement activity, and more than the required measures in the advancing care information performance category.



Note: This start date provides an opportunity for a small positive or neutral MIPS performance payment adjustment (but not as much as participation for the full year) on January 1, 2019.


3. MIPS Option 3: Medicare-participating clinicians can choose to report only 1 measure in the quality performance category or 1 activity in the clinical practice improvement activities performance category or report the required measures of the advancing care information performance category.



Note: This minimal reporting will avoid a negative MIPS payment adjustment.


4. MIPS Option 4: Medicare-participating, MIPS-eligible clinicians can choose to not report even 1 measure or activity.



Note: This lack of reporting will result in a full negative 4% adjustment to their Medicare payments in 2019.


The Advanced APM pathway is designed for clinicians who are participating in specific value-based care models.


* Advanced APM Option: Clinicians can participate in Advanced APMs if they receive a sufficient portion of their Medicare payments or see a sufficient portion of their Medicare patients through the Advanced APM. They will avoid the MIPS reporting requirements and payment adjustments and will qualify for a 5% incentive bonus in 2019.




MIPS Payment Adjustments: Depending on the data the clinicians submit by March 31, 2018, their Medicare payments in CY 2019 will be adjusted up, down, or not at all.


For 2019 only, the MIPS pathway payment adjustments will be as follows:


* -4% payment adjustment if the clinicians do not submit any 2017 data


* no payment adjustment if the clinicians submit a minimum amount of 2017 data, for example, 1 quality measure or 1 improvement activity in 2017


* a neutral or small positive payment adjustment if the clinicians submit only 90 days of 2017 data


* a moderate positive payment (maximum +/-4% bonus or reduction) adjustment if the clinicians submit a full year of 2017 data. Note: These clinicians will also be eligible for a potential exceptional performer bonus in 2019. For 2019 only, the MIPS performance threshold will be 3 points. Clinicians who achieve a final score of 70 or higher will be eligible for the exceptional performance adjustment.



In 2020, the positive/negative payment adjustment is +/-5%; in 2021, it increases to +/-7%, and in 2022, it increases further to +/-9%.


Advanced APM Payment Adjustment

Advanced APMs must meet the following requirements:


* Be approved CMS Innovation Center models, Shared Savings Program tracks, or certain Federal demonstration programs


* Require participants to use CEHRT (at least 50% of eligible clinicians in the first year and 75% of participants thereafter)


* Base payments for services on quality measures comparable to those in MIPS


* Be a Medical Home Model expanded under Innovation Center authority or require participants to bear more than nominal financial risk for losses. The risk requirement for an Advanced APM must be in terms of either total Medicare expenditures or participating organizations' Medicare revenue (which may vary significantly). This enhanced flexibility allows for the creation of more Advanced APMs tailored to physicians and other clinicians, for example, advanced practice nurses and small practice participation.



If the clinicians select the Advanced APM track and if they receive 25% of Medicare payments or see 20% of their Medicare patients through an Advanced APM in 2017, their payment adjustment on 2019 will be 5% of their prior years' Medicare Part B payments (Figure).


Quality Payment Program Resources: Because the CMS and the Medicare-participating clinicians will be working together toward a big goal of being rewarded for providing better patient care, the Quality Payment Program is starting slow. Medicare hopes that these kinds of smarter payments will give clinicians more time to spend with their patients and to care for them in ways the clinicians think are best.


The entire Quality Payment Program regulation can be viewed at


The CMS has created a Quality Payment Program website where participating clinicians can learn about the program, explore the quality measures, and access the education and resource library where they will find links to official information that will help them prepare for success in the Quality Payment Program:


To receive the latest Quality Payment Program e-mail updates, subscribe at


The Quality Payment Program Service Center is available to help Monday through Friday from 8:00 AM to 8:00 PM Eastern Time, 1-866-288-8292; TTY 1-877-715-6222.


For inquiries related to MIPS, contact Molly MacHarris at 410-786-4461.


For inquiries related to Advanced APMs, contact James P. Sharp at 410-786-7388.


Medicare also wants to hear from clinicians and will be listening carefully for ways to improve the Quality Payment Program. Submit questions and suggestions to