skip to Main Content
  • This page as PDF

E1 – Navigating MACRA in the First Performance Year


2017 marks the first performance year for providers in the value-based Quality Payment Program (QPP), which implements two new payment models for clinicians who participate in Medicare. Tune in as our experts kick off a podcast series covering: Requirements and payment adjustments under QPP 2017 performance year milestones, qualifying clinicians for Alternative Payment Models (APMs), and optimizing the Merit-Based Incentive Payment System (MIPS).
“Roughly ⅓ of clinicians billing Medicare Part B will be excluded from MIPS and the QPP based on the low-volume exclusion.” John Feore, Director, Avalere


John Feore , Associate Principal, Center for Healthcare Transformation

John Feore advises healthcare providers, plans, and life sciences companies on the transformation of the healthcare system.

Listen to Other Podcasts in This Series

E2 – Qualifying Alternative Payment Model Participants

E3 – Positioning for Success in the Merit-Based Incentive Payment System


John: Welcome to today’s podcast to introduce the Quality Payment Program (QPP). This will be the first of three Avalere podcasts discussing various elements of this program. My name is John Feore, and I am a director in the Avalere Center for Payment & Delivery Innovation.

The QPP was brought about by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The QPP was created by CMS to implement MACRA’s two paths for clinicians participating in Medicare: (1) the Merit-based Incentive Payment System (MIPS); and (2) Advanced Alternative Payment Models (Advanced APMs). In October 2016, CMS finalized the QPP’s regulatory requirements, which went live on January 1 this year.

MACRA was enacted to repeal the sustainable growth rate formula (SGR) avoiding the costly, annual doc fixes that Congress was forced to negotiate each year for over a decade. Congress repealed the SGR through MACRA and created the QPP, which consolidates elements of three existing reporting programs and also provides strong incentives for clinicians to join Advanced APMs.

MIPS replaces three existing quality reporting programs: (1) PQRS; (2) EHR meaningful use; and (3) the value-based payment modifier. Under MIPS, eligible clinicians will see annual payment adjustments, which could be positive or negative, based on the clinicians’ performance on four performance categories: (1) quality; (2) cost; (3) advancing care information, also known as meaningful use; and (4) practice improvement activities.

Roughly ⅓ of clinicians billing Medicare Part B will be excluded from MIPS and the QPP based on the low-volume exclusion. For 2017, a clinician with less than or equal to $30,000 in Part B allowed charges or 100 or fewer Medicare patients qualify for this low-volume threshold exclusion.

The MIPS payment adjustments will be budget-neutral program-wide, with a separate pool of funds for high performing providers. The lowest performers will see payment reductions that will be paid to the highest performers. The budget-neutral payment adjustment will be a maximum positive or negative 4% for performance year 2017, increasing over three years to +/-9%.

A clinician’s performance in 2017 will impact payment adjustments made in 2019. Thus, similar to other CMS quality programs, the performance year dictates payment adjustments that will be made in the payment year, reflected by a two-year lag. Performance year 2018 will dictate bonuses or penalties in 2020, and so on.

Eligible clinicians that sufficiently participate in Advanced APMs during a performance year will be exempt from MIPS and will instead receive a 5% bonus payment regardless of how they perform under the Advanced APM. Similar to MIPS, performance in 2017 will dictate payment in 2019. The 5% bonus payment will be effective for six consecutive performance years.

An Advanced APM is an alternative payment model that (1) requires participants to use certified health IT; (2) pays providers based on quality measures comparable to those required under MIPS; and (3) requires that the APM entity bear more than nominal financial risk. APMs that meet these stringent criteria to be considered an Advanced APM in 2017 include downside risk ACOs—such as Medicare Shared Savings Program Tracks 2 and 3 and the Next Generation ACO model—along with the Oncology Care Model, Comprehensive Primary Care Plus demonstration, and risk-bearing Comprehensive ESRD Care Models.

In the early years of the QPP, most clinicians will participate through MIPS. However, CMS intends to increase the number of Advanced APM options for clinicians in 2018 and beyond.

CMS is phasing in the requirements of the QPP, treating 2017 as a transitional year. In this first performance year of the QPP, clinicians may choose one of three MIPS reporting options: (1) minimal reporting to simply test the program, where a provider will not receive a bonus payment or reduction; (2) partial participation, where slightly more reporting must occur over a period of at least 90 days—here, a provider avoids a payment cut and may qualify for a small positive adjustment; or (3) full participation in MIPS, which subjects a provider to positive or negative payment adjustments. Providers that do not report on any measure will receive the full 4% payment cut. CMS also chose not to grade clinicians on the MIPS cost performance category in 2017.

MACRA garnered the bipartisan support of 90% of Congress, including the new Secretary of Health and Human Services. With a changing administration and a doctor now in charge of HHS, we expect that the QPP will continue to be implemented with an eye toward flexibility for clinicians and increasing the number of Advanced APM options.

In our next podcast, we will discuss what it means to be a clinician sufficiently participating in an Advanced APM.

From beginning to end, our team synergy
produces measurable results. Let's work together.
Back To Top