Moving from Quantitative Fee for Services to Quality Payments

This blog outlines the task that the Centers of Medicare & Medicaid Services (CMS) has been tasked to move from a fee based quantitative payment system (fee for service) to a quality payment system. Their authority is under the direction of the Medicare Access & CHIP Reauthorization Act (MACRA) of 2015. The proposed rule was issued on April 27, 2016 by CMS and currently goes into effect on January 1, 2017.


Three important changes will be made which will directly affect how Medicare will pay for services rendered by health care providers to patients. CMS detailed links are helpful toward understanding. The three changes are:

  1. Ending the SGR (Sustainable Growth Rate) forum
  2. Rewarding health care providers for better care outcome rather than quantity
  3. Combining several government quality reporting programs

These changes will greatly reduce payments determined primarily by number of services billed (quantity) to a quality measurement by implementing two payment paths.

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


This posting focuses on the MIPS portion of the MACRS. How's that for confusing? The following explanations should help.

What is MIPS?

The MIPS path feels somewhat comfortable to a vast majority of healthcare providers because of its relationship to several current methods of payments and penalties they have been dealing with over the last several years. However, there are some rather significant differences. It will incorporate components from several of the current quality measurement CMS programs. It will also determine a weighted scale of 0-100 which will result in a composite score including both the good and bad outcomes. They quality programs that have survived thus far are:

  • Physician Quality Reporting System (PQRS)
  • Value-based Payment Modifier (Value Modifier)
  • Medicare Electronic Health Record (EHR) incentive and penalties.


Who IS affected and who IS NOT?

The MIPS program is only applicable to physicians and CMS defined physician/providers (nurse practitioners, physician assistants, clinical nurse specialist, and certified registered nurse anesthetists).

There are three categories of professionals who cannot be a part of MIPS.

  1. First year enrollee to Medicare
  2. Low volume provider
  3. Participants in eligible Alternative Payment Models who qualify for the bonus payment

What are MIPS merit-based incentive performance categories?

Eligible professionals will be measured on:

  • Quality – There will be a deeper drive into current reporting methodologies with a reduction from nine to six. In the absence of an applicable outcome measure, a high priority measure may be substituted such as the patient’s experience, safety, to name a few.
  • Resource use – There will be a comparison of resources used to treat similar care episodes and clinical conditions groups across practices, without additional data submission.
  • Clinical practice improvement (CPIA) – There will be 9 categories you can earn partial credits which will help increase your score.
  1. Integrated behavioral and mental health
  2. Participation in an APM or medical home
  3. Emergency preparedness
  4. Population management
  5. Expanded practice access
  6. Achieving health equity
  7. Care coordination
  8. Beneficiary engagement
  9. Patient safety
  • Meaningful use of certified EHR technology

The Path to Value pdf gives visual representaion of how the program works.

Hopefully this overview and the links will get you started making progress on these important and time-sensitive regulations.


Renee M. Brown, CMIS, ACS-EM, CHA is president and managing partner of Medical Practice Consultants, Inc. (MPC). She is a Certified Healthcare Auditor (CHA), a Certified Medical Insurance Specialist (CMIS), Advanced Coding Specialist for Evaluation/Management services (ACS – EM) as well as a trainer to Medical Group Management Association (MGMA) and American Academy of Professional Coders (AAPC) and large hospital organizations throughout the United States.


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