Under the new Quality Payment Program (QPP) mandated by the Medicare Access and CHIP Reauthorization Act of 2017 (MACRA), physicians who annually bill more than $30,000 in Medicare charges or see more than 100 Medicare patients are required to participate in the Merit-Based Incentive Payment System (MIPS), unless they participate in certain Medicare alternative payment models.

To comply with MIPS, physicians must report and will be evaluated based on performance in four categories: quality, cost, improvement activities, and advancing care information (previously known as meaningful use requirements for electronic health records). The Centers for Medicare and Medicaid Services (CMS) will score physician performance and use the score to determine the applicable payment penalties or incentives, which could range from ±4 percent in 2019 to ±9 percent in 2022 and subsequent years.

CMS will evaluate physicians based on performance two years prior to the year in which the resulting payment adjustment will be made, which means that 2017 is the performance year for 2019 payment adjustments. To assist physicians with the transition to this new program, CMS provided significant flexibility in its 2017 requirements. Those physicians who simply want to avoid a payment penalty can submit a minimal amount of data. However, physicians who submit certain data for a period of at least 90 days may earn a bonus payment, which CMS has described as “small to modest.” Physicians who report no data will automatically receive a 4 percent cut to their Medicare Physician Fee Schedule payments in 2019.

Physicians, as well as hospitals and other organizations that bill on behalf of physicians, will need to be aware of the MIPS requirements and their potential impact on physician revenues and contracting. We will monitor developments, as we expect MIPS requirements to evolve and become more stringent as CMS continues to roll out the program.