Breakdown of the Final MACRA Rule

Guest post by Abhinav Shashank, CEO and co-founder, Innovaccer.

Abhinav Shashank
Abhinav Shashank

A new complex rule is about to change the entire US healthcare industry. It will replace the Sustainable Growth Rate (SGR) and streamline the three programs. The NPRM for MACRA was passed in 2015 and after the comments and feedbacks from numerous healthcare experts, the final rule with comment period has been released by CMS.

In the final rule, CMS has responded to more than 4,000 comments in a document which is more than 2,300 pages long. Some of these comments have been implemented in the law. As a result of this feedback friendly approach, substantial changes have been made.

The New MACRA after changes

The law aims to bring in unified policies that will add greater value to the healthcare system through the new Quality Payment Program (QPP). The program rewards for value in two ways:

Chance to adapt

To help the physicians get used to the program CMS has declared the first year — 2017 — as “transition” year. There will be four options available to physicians in the transition year:

Merit-based Incentive Payment System

Under this program, eligible clinicians will get payment adjustments based on the quality, cost and other measures related to care. This program will see the “sunset” of three existing programs namely:

The term “sunset” is crucial here as CMS clarified that because of the regulatory nature of the text and its statutory requirements, they cannot delete the text from the public records, rather amend it with a date which will mark the end of the program.

CMS will use the Composite Performance Score (CPS) to measure the performance of participants. This score was designed to comprise four components. The new rule has seen some significant changes in each category and the biggest change being the exclusion of the resource category to calculate the performance of the participant. The weight of each category has been accordingly changed:

However, CMS would still measure the performance of practices in the Resource category to provide feedback. These weights are subject to change and by 2021 cost category will weight 30 percent.

CMS has changed the criteria to determine whether a practice would be exempt from MIPS or not. The small practices are exempt from MIPS if they do not reach the low volume threshold. The low volume threshold has been increased to $30,000 in Medicare part B allowed charges or less than 100 Medicare patients. A significant change from the previous threshold which was set on “$10,000 in Medicare Part B charges AND less than or equal to 100 Medicare Patients.

CMS will provide technical assistance of total $100 million ($20 million each year) to small practices, rural areas and practices located in Health Professional Shortage Areas (HPSAs) and other forms of assistance to MIPS EC (eligible clinician) practices with fewer than 15 ECs.

Quality Category

Every year on November 1, a list of quality measures will be published in the Federal Register. According to the final rule, an eligible clinician under MIPS is required to report on at least six measures which, if possible, should include an outcome measure. If fewer than six measures are applicable then the eligible clinician is required to report on all the applicable measures. A MIPS eligible clinician must continue this process for 90 days in order to receive positive adjustments.

A MIPS EC or group can report on six measures or specialty-specific measure set or sub-specialty measure set. If there are more than six applicable measures than EC can choose to report on any six measures within a set. No matter how many measures are there in the set, an EC is required to report on at least one outcome measure and if there is no outcome measure than he has to report on a high priority measure (appropriate sue, patient safety, efficiency, patient experience, and care coordination).

Clinical Practice Improvement Activities (CPIA)

CMS has defined “improvement activities” as the ones that aid the broader aims of the healthcare industry such as enhanced care coordination, engagement, population health management, and equitability in health.

After receiving the feedback from many experts, CMS has reduced the number of activities that are required to achieve the full score from six medium-weighted or three high weighted activities to four medium-weighted or two-high weighted activities. Besides this, for small practices, rural areas, and practices located in Health Professional Shortage Areas and non-patient facing MIPS ECs, it is just one high-weighted or two medium-weighted activities.

Advancing Care Information (ACI)

This category focuses on and health information exchange through the use of Certified Electronic Health Record (CEHRT). CMS in the final rule with comment period has reduced the number of measures from eleven to five, and all the remaining ones would be optional to report on. Reporting on optional measures will help MIPS ECs qualify for a bonus.


For the transition year, the weight of cost category is zero percent. However, after the transition year, there will be a gradual increase in the weight of it. However, CMS does not require the ECs to report on this measure. Additionally, CMS has finalized ten episode-based measures

Advanced APMs

All the providers who receive a significant amount of reimbursements from Advanced APMs and are able to bear more than the nominal risk will be recognized as advanced APM. The set standard by CMS is that a potential downside of eight percent of all Medicare reimbursements or three percent (reduced from four percent in proposed rule) of the expected expenditure for which the provider is responsible under APM.

There are two types of Advanced APMs:

CMS will explore the models that qualify for Advanced APM through enhanced ACO Track 1+ model for 2018 and will also revisit the Comprehensive Care for Joint Replacement.

To qualify as Advanced APM:

The MIPS APM (existing APMS that do not meet the statutory requirements of Advanced APMs) will be required to report under MIPS guidelines and will be subject to payment adjustments of MIPS.

CMS declared that it expects following models to qualify as advanced APMs under the program for the 2017 program year:

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