MACRA and the Quality Payment Program (QPP)

Including MIPS and APM

The Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) took affect January 1, 2017 as Medicare's Quality Payment Program (QPP). QPP effects physician reimbursement under two options: Merit-based Incentive Payment System (MIPS) and Alternate Payment Models (APM).

MACRA also is a statutory regulation. The Senate passed this bill with a bipartisan 92-8 vote. The Medicare portion of the bill ended the annual Sustainable Growth Rate (SGR) formula for physician Medicare reimbursement (which you may remember as the annual “doctor fix”).

MACRA continues the shift from volume to value (see above) on the outpatient side as it creates a framework for rewarding providers for giving “better care” in their practices/clinics.  It also combines several prior programs such as:

  • Physician Quality Reporting System (PQRS)
  • Meaningful Use EMR incentive payments (MU)
  • Value Modifier (VM or Value-based Payment Modifier).

MACRA is the law; QPP is the implementation of part of that law

MACRA legislation has become the Medicare Quality Payment Program (QPP).  QPP impacts most physicians who see patients outside of the hospital (including some with hospital-based clinics).  The program began on January 1, 2017 and affects these physicians’ CMS payments for 2019. Physicians and other providers participate with QPP under two models:

  • Merit-based Incentive Payment System (MIPS)
  • Alternative Payment Models (APMs)

While participation in these two models is “voluntary”, providers not submitting data by Q4 2017 will take a 4% reduction in Medicare payments in 2019.  These penalties expand to 5%, 7% and 9% in subsequent years.

Most physicians already in an ACO will likely quality under the APM.  Others will need to join under MIPS. Participants with great outcomes share Medicare bonuses and avoid penalties.  Medicare excludes physicians who are in their first year of the Medicare program or who see a low volume of Medicare patients.  Some physicians under Meaningful Use waivers in the past will not be eligible under the QPP.

You can access more information on MACRA and the QPP at and at  Many physicians remain confused about QPP and have not yet created a strategy for their practices[1].



Bar graph showing MIPS reimbursement models 2016-20122
Figure 1. Graph shows growth in Medicare payments ($10K baseline) over next few years based on full MIPS bonuses (green line), full MIPS penalties (red bars) or neutral (black hashes in center of clear histogram bars). Note: 18% differences between winners & losers.

The Growing Divergence in Physician Reimbursement between potential rewards and penalties under MIPS:

As the graph illustrates, there will be a growing gap in Medicare reimbursements between physicians successfully participating with MIPS under the QPP and those who do not.

We must remember, that under the QPP, CMS reimbursement impact occurs two years after performance.  <<Learn More>>

My Summary Analysis of MACRA and the QPP


  • Creates clear incentives for innovation and improved outcomes in ambulatory healthcare.
  • Moves us more from volume-based to value-based care.
  • Can be a viable foundation for future innovations.

The BAD:

  • The miscommunications to physicians:
    • That MU has gone away (when still in effect for Medicaid providers, hospitals, and transformed to Advancing Care Information (ACI) under MIPS
    • That providers have till Oct 2017 to start:
      • A sense they have no need to prepare now
      • When October is the latest they must start collecting data to avoid penalties in 2019
    • This is a voluntary program
      • Even though the delta between participation and non-participation is 8% for this year’s actions and rises quickly to 18%.[2]


So what does this mean in the climate of Med Rec and how will it play out?

In the context of the current healthcare climate, the QPP has provided a healthy vision and workable model to move the ambulatory care space providers from volume to value.  CMS has offered really well executed and helpful webinars and in-person seminars and provided a well organized website.  However, I believe a large number of physicians have not taken advantage of these opportunities and not fully prepared for the transition.  My predictions are:

  • In early 2018, many physicians will start complaining that they did not get a fair raise on their Medicare rates (which are preset by MACRA as 0.5% for 2018).
  • In late 2018, another group of physicians (who will claim they were not aware of QPP)  will wake up to the fact that their Medicare fees will go down in January 2019 by 4%.
  • After a major outcry, a legislative exception will be entertained (especially if the awareness occurs before the mid-term elections.

Hopefully we are can continue to work to get the word out and get our healthcare providers on-board.  The main problem, in my opinion, remains that the physicians have had so many new programs, reimbursement changes and regulations and just cannot keep up with all of it.  Hopefully Congress will stay the course on this one and focus efforts on medication management and fixing Med Wreck.  Changes in medication management could include a path for MIPS credits for early adoption and become a win-win for everyone.  At the end of the day, we really want a safer and less costly healthcare system.


[1] Despite massive communication efforts by many professional organizations, several national surveys in the past 6 months estimate that less than 20% of affected physicians are prepared to participate in the QPP

[2] See impact on author’s analysis at “How much are Doctors leaving on the table with MACRA?”