October 14, 2016
1 min read

HHS finalizes MACRA payment system for physicians

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HHS announced today that it has finalized a new payment system that promises to change how Medicare payments are tied to the cost and quality of care.

The Medicare Access and CHIP Reauthorizaton Act (MACRA) Quality Payment Program replaces the Sustainable Growth Rate formula.

Sylvia Mathews Burwell
Sylvia M. Burwell

“Today, we’re proud to put into action Congress’ bipartisan vision of a Medicare program that rewards clinicians for delivering quality care to their patients,” HHS Secretary Sylvia M. Burwell said in a news release.

HHS said the final policy reflects changes that are meant to provide flexibility, simplicity and support for small practices, a concern that was commonly raised among physicians in public comments.
Small practices that meet a low-volume threshold — either $30,000 or less in Medicare Part B-allowed charges or 100 or fewer Medicare patients — will be excluded from new requirements in 2017.

This represents 32.5% of pre-exclusion Medicare clinicians but only 5% of Medicare Part B spending, according to CMS.

“Today’s policies are designed to get all eligible clinicians to participate in the program, so they are set up for successful care delivery as the program matures,” CMS acting administrator Andy Slavitt said in the release.

Under the new payment system, clinicians can choose the pace with which they will participate in the transition from a fee-for-service health care system to one using alternative payment models rewarding quality care over quantity of service.

Clinicians choosing the Advanced Alternative Payment Models (APMs) may earn an incentive payment for participating in an innovative payment model. In the traditional Merit-based Incentive Payment System (MIPS), clinicians earn a performance-based payment adjustment.

The first performance period opens Jan. 1, 2017, and runs through the end of the year. Clinicians can choose to start collecting performance data between Jan. 1 and Oct. 2. Data are due by March 31, 2018, with the first performance-based adjustments going into effect on Jan. 1, 2019.


HHS. HHS finalizes streamlined Medicare payment system that rewards clinicians for quality patient care. 2016. https://www.hhs.gov/about/news/2016/10/14/hhs-finalizes-streamlined-medicare-payment-system-rewards-clinicians-quality-patient-care.html. Accessed Oct. 14, 2016.

For more information:

Centers for Medicare and Medicaid Services. Quality payment program: Modernizing Medicare to provide better care and smarter spending for a healthier America. https://qpp.cms.gov/. Accessed Oct. 14, 2016.