Wednesday, November 25, 2015

The Merit-Based Incentive Payment System (MIPS) & Alternative Payment Models (APMs): Delivery System Reform, Medicare Payment Reform, & the MACRA

This MACRA system makes three important change to how Medicare pays those providers who give care to Medicare beneficiaries. The areas that have changed are as follows:

  • 1.      This new system ends the Sustainable Growth Rate (SGR) formula that was crucial in determining the reimbursement/payment to healthcare providers for services delivered to their Medicare beneficiaries.
  • 2.      Establishing a new framework to establish a reward system for healthcare providers that deliver better or higher quality care, not just more care over more dates of service (DOS).
  • 3.      Eliminating the fragmented quality reporting program and establishing a single system for the reporting of quality results.

The new MACRA reform works in a way that will enhance and expedite the change of the payment structure from billing for services, without the weight of quality figured in, to a system that reimburses based on value and quality of care delivered to the patient. In addition, the MACRA system streamlines and simplifies the process in which a provider can successfully take part in Medicare’s quality programs by initiating:

  • 1.      A Merit-Based Incentive Payment System (MIPS)
  • 2.      Alternative Payment Models (APM)

These two new systems will be go into effect through the upcoming years from 2015-2021 and beyond.

MIPS is a program that combines parts of the existing Physician Quality Reporting System (PQRS), the Value Modifier (VM) or otherwise known as Value-based Payment Modifier, and Medicare Electronic Health Record (EHR) incentive program into one single system that is based on:
  • ·         Quality
  • ·         Resource use
  • ·         Clinical practice improvement
  • ·         Meaningful Use for EHR

The APM model is designed to give providers new ways to get paid for the care that they give Medicare Beneficiaries. This includes lump-sum incentive payment, increased transparency for physician-focused payment models, and offering higher annual payments.

The timeline for MIPS and APM starts in 2015 and will go through 2016, and later. The payments will include for MIPS incentives of quality, resource use, clinical improvements, and meaningful use from 4% through 9% in 2016. APMs will have a 5% incentive payment and is excluded from MIPS.
For more information on MACRA you can go to:

For more information on the Medicare Access and CHIP Reauthorization Act you can to to:

Submitted by Kevin Harrington, Full Time Faculty, Health Administration, 
Saint Joseph's College.   Contact Kevin at if you would like to discuss this further.

No comments: