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MACRA and MIPS Incentives and Penalties

MACRA establishes a 0.5 percent physician fee schedule update each year from 2016 through 2019. In addition, MIPS clinicians should expect to see payment adjustments based on performance—either up or down.

In previous CMS programs, like VM, a majority of groups fell into an average quality and cost performance that received no payment adjustment. However, under MACRA and MIPS, only clinicians exactly at the Composite Performance Score (CPS) threshold will see no payment adjustment. For 2019, only 0.3% of eligible clinicians (ECs) will receive 0% adjustment. That means roughly half of ECs will earn a bonus in 2019 based on their performance in 2017. The other half will get a pay cut as underperformers.

Clinicians that fall one point above the threshold will receive a bonus, and one point below the threshold will receive a penalty. The further a provider’s CPS is above or below the threshold, the larger the reward or penalty, up to a 4% max in 2019. High performers will receive additional incentives.

Expect Complexity

CMS has proposed a complex process for compiling data and calculating each physician’s CPS, establishing performance thresholds, and making payment adjustments. CMS will finalize these details in the final MIPS rule, which should be published in late 2016.

APM Payment Adjustments

Clinicians on this track are exempt from MIPS requirements and will be rewarded annual lump-sum bonus increases of up to 5%.

How to Prepare

For now, continue with programs you are currently participating in. Calendar year 2016 performance for Meaningful Use, PQRS and the VM programs will still impact the 2018 Medicare Part B fee schedule. In addition, learn as much as you can about these rapidly approaching changes.