What is MACRA?

The Medicare Access and CHIP Reauthorization Act (MACRA) was signed on April 16, 2015 and replaces the current Medicare reimbursement schedule and ends the Sustainable Growth Rate formula with a new pay-for-performance program focusing on quality, value, and accountability replacing the previous fee-for-service model.

Quality Payment Program

What’s the Quality Payment Program?

MACRA replaced the Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VBM), and the Medicare Electronic Health Record (EHR) incentive program and tries to simplify them into one new Quality Payment Program (QPP) with two paths:

  1. The Merit-based Incentive Payment System (MIPS) and
  2. Advanced Alternative Payment Models (APMs).

Most providers will initially participate through MIPS.

What is MIPS?

Under MIPS, clinicians are included if they are an eligible clinician type (EC/EP) and meet the low volume threshold (LVT), which is based on allowed charges for covered professional services under the Medicare Physician Fee Schedule (PFS) and the number of Medicare Part B patients who are furnished covered professional services under the Medicare Physician Fee Schedule.

The 4 scorable MIPS categories in 2021 are:

40% of Total Score


25% of Total Score

Promoting Interoperability

15% of Total Score

Improvement Activities

20% of Total Score


Who Qualifies as an EP?

Who is Eligible?

Providers that bill more than $90,000 a year in allowed charges for covered  professional services under the Medicare Physician Fee Schedule (PFS), and furnish. covered professional services to more than 200 Medicare beneficiaries, and provide more than 200 covered professional services under the PFS.

Who is Exempted?

Qualifying APM participants, providers with minimum volume threshold of patients or payments, or provider’s in their first enrollment year with Medicare Part B.

How MIPS will be Scored?

A clinician can choose to participate as an individual or in a group for each NPI/TIN combination that they bill under. CMS will apply the payment adjustment at the individual TIN/NPI level for individual submissions and at the practice level for group submissions.

Under MIPS, eligible clinicians (ECs) will be scored annually in four performance categories to derive a MIPS composite score between 0 and 100. The four categories are Quality, Cost, Promoting Interoperability and Improvement Activities.

(45% of the final score)

This performance category replaces Physician Quality Reporting System (PQRS). This category covers the quality of care delivered by medical practitioners, which is based on performance measures created by CMS (Centers for Medicare & Medicaid Services) and medical professional/stakeholder groups.

Promoting Interoperability
(25% of the final score)

This performance category of MIPS score replaces the Value-based Payment Modifier (VBM). CMS will calculate the cost of the services that physicians provide based on Medicare claims. MIPS uses cost measures to assess the total cost of care during a hospital stay or a year. Since the beginning of 2018, this performance category is being counted in the MIPS final score.

Improvement Activities
(15% of the final score)

This relatively new performance category gauges’ improvement in care processes, enhancement of patient engagement in care, and increase of access to care. This category allows physicians to choose the activities that are relevant to their practice from the classifications such as improving care coordination, expansion of access to practice, and shared decision-making of patient and clinician.

Cost Measures
(15% of the final score)

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What determines my final MIPS Score (CPS)?

Final MIPS Score = Quality Weighted Score (40%) + PI Weighted Score (25%) + IA Weighted Score (15%) + Cost Weighted Score (15%) + Complex Patient Bonus (if applicable) + Small Practice Bonus (if applicable)

  • The MIPS score earned by a clinician or group for the performance period determines the adjustment applied to every Medicare Part B payment to the clinician.
  • The payment adjustment occurs in the second calendar year after the performance year. So, for PY2021, the payment adjustment would occur beginning with 2023 reimbursements.

Why Report MIPS:

Financial rewards received by physicians under this system for providing good quality care, improvement, and reporting to the CMS. Moreover, physicians can earn a positive payment adjustment. However, if physicians choose not to report, they can be penalized and lose compensation.

  • 2019: +/- 4% of Medicare payments based on performance
  • 2020: +/- 5% of Medicare payments based on performance
  • 2021: +/- 7% of Medicare payments based on performance
  • 2022: +/- 9% of Medicare payments based on performance

What is the minimum MIPS score I have to achieve to avoid a penalty in 2023?

For 2021 the performance threshold is set at 60 points (increased from 45 in 2020).

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