The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule (the “Proposed Rule”) establishing two physician payment systems introduced by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). These two systems, the Merit-based Incentive Payment System (MIPS) and the Alternative Payment Models (APM), change the way Medicare incorporates quality metrics into physician payments. Additionally, the Proposed Rule will help Medicare develop new policies to address and incentivize physician participation in alternative payment methods.

Coming in at over 900 pages, the Proposed Rule is complex and stakeholders should take the time to unpack all the provisions. CMS proposes rolling out the two physician payment systems in early 2017 so stakeholders do not have a lot of lead time in preparing their own systems, especially since the final rules will not be released until later this year.

Merit-Based Incentive Payment System (MIPS)

The purpose of MIPS is to streamline payments while maintaining a focus on quality and reducing redundancies. MIPS consolidates three programs: the Physician Quality Reporting System, the Physician Value-Based Payment Modifier, and the Medicare Electronic Health Record (EHR) Incentive Program into one program and winds down payment adjustments under the previous programs. MIPS would apply to eligible clinicians, including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and groups that include these practitioners.

To determine the incentive payments clinicians receive, MIPS would use four performance categories: quality, resource use, clinical practice improvement activities, and meaningful use of certified EHR technology. Within each category, CMS proposes up to six standards to determine how the clinician performed under each category, aggregating the scores to create a MIPS composite performance score. This score would then be used to determine if the clinician receives an upward or downward payment adjustment, or no payment adjustment.

Alternative Payment Models (APMs)

CMS also proposes to move more fee-for-service payments into APMs in order to focus on better care and smarter spending for healthier beneficiaries. The Proposed Rule suggests two types of APMs: Advanced APMs and Other Payer APMs. An Other Payer APM is an arrangement in which eligible clinicians pay participate through other payers. An Advanced APM provides a path through which eligible clinicians can become a Qualifying APM Professional and earn incentive payments for participating in the APM. Both types of APMs require use of certified EHR technology and be either a Medical Home Model (or a comparable Medicaid Medical Home Model for Other Payer APMs) or bear more than a nominal amount of risk for monetary losses. Additionally, both types of APMs would use quality measures comparable to those used by the MIPS program.

Comments on CMS’ proposed rule are accepted until June 27, 2016. Interested parties can comment electronically on regulations.gov, or send their written comments to Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attention: CMS-5517-P, P.O. Box 8013, Baltimore, MD 21244-8013. When commenting, make sure to reference CMS-5517-P when sending written comments.