CMS Finalizes Changes to the Future of Physician Reimbursement with the Quality Payment Program

by Baker Ober Health Law

CMS released the Final Rule with comment period delineating a portion of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) known as the Quality Payment Program (QPP) on October 14, 2016, with the official Federal Register version to be released on November 4, 2016. With the introduction of the QPP Proposed Rule earlier this year, CMS spurred a flurry of feedback and concerns from various stakeholders, especially those providers in small, independent practices. CMS received approximately 4,000 comments on its Proposed Rule, and, as a result, CMS introduced several notable changes in the Final Rule and launched a website to educate people about the QPP. One significant change in the Final Rule is that providers can pick alternative options for participation instead of full participation during the first performance period, which begins on January 1, 2017.

Prior to MACRA, CMS used a complex statutory formula, called the Sustainable Growth Rate, in an attempt to lower overall physician reimbursement from the Medicare Part B Trust Fund. The QPP supersedes the annual threat of reduced physician reimbursement posed by the Sustainable Growth Rate. Now, under the QPP, CMS will use a complex system of quality measures and combine previously distinct quality reporting programs under one program. As explained in our prior updates here and here, physicians, physician practice groups, non-physician practitioners, and other health care industry stakeholders will need to understand QPP and its two tracks: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs). An in-depth resource for industry stakeholders on the QPP is forthcoming from the Ober|Kaler team. At this time, a high-level summary of both tracks are included below.

The Merit-Based Incentive Payment System

Under MIPS, CMS consolidated a variety of reporting systems, including the Physician Quality Reporting System, the Value-Based Payment Modifier, and the Medicare Electronic Health Record incentive program. MIPS will apply only to MIPS Eligible Clinicians (ECs), comprised of:

  • Physicians,
  • Physician Assistants,
  • Certified Registered Nurse Anesthetists,
  • Nurse Practitioners,
  • Clinical Nurse Specialists, and
  • Groups that include such professionals.

CMS will evaluate ECs based on four performance categories: quality, resource use (cost), clinical practice improvement, and meaningful use of certified electronic health records technology (CEHRT). CMS ascribes different weights to each performance category, and CMS can change these weights over time.

CMS begins collecting MIPS scores on January 1, 2017, and CMS will use those scores to provide payment adjustments to ECs' Medicare payments beginning in 2019. CMS will provide payment increases and decreases to ECs of up to 4% in 2019. That maximum percentage will increase annually from 4% until it reaches 9% in 2022, and it is unknown whether the maximum percentage will increase in subsequent years after 2022.

Advanced Alternative Payment Models

CMS created a second track for providers who are participating in certain APMs that meet additional QPP-imposed requirements, called Advanced APMs. Providers who receive 25% of Medicare payments or see 20% of their Medicare patients through an Advanced APM could qualify for incentive payments and be exempt from the MIPS criteria discussed above. Incentive payments will take the form of a 5% increase in Medicare reimbursement beginning in 2019 and are in addition to the incentives built-in to the APM. CMS has currently announced the following Advanced APMs:

  • Comprehensive Primary Care Plus (CPC+),
  • Medicare Shared Savings Program – Tracks 2 and 3,
  • Next Generation Accountable Care Organization Model,
  • Comprehensive ESRD Care Model (accountable care model for large dialysis organizations), and
  • Oncology Care Model Two-Sided Risk Arrangement.

CMS also introduced in the Final Rule a new Medicare Accountable Care Organization (ACO), called the ACO Track 1+ model. CMS hints that the Track 1+ model will qualify as an Advanced APM and will include lower risk levels for participation in contrast to its Track 1 counterpart. Further details on the ACO Track 1+ model is anticipated from CMS. Additionally, CMS plans to expedite the development of APMs in general so that providers have more options for potential participation in the Advanced APM track of the QPP.

Ober|Kaler's Comments

The Final Rule makes it clear that the QPP could impact the reimbursement of every physician and non-physician practitioner. Although Medicare's Physician Fee Schedule remains unchanged, CMS is subjecting providers, via the QPP, to risk-adjusted payments by tying those payments to quality measures. Whether participating in MIPS or an Advanced APM, physicians can expect the QPP to add complexity in this new era of billing, collecting, and understanding reimbursement.

The Final Rule also allows for a transitional approach for participation. With 2017 as a transition year, physicians, non-physician practitioners, and other health care industry stakeholders should take advantage of this transition by evaluating the QPP's requirements to determine the impact of future payment adjustments, which begin in 2019, against the investment in possible options to maximize reimbursement in such a program.

The percentage of providers subject to risk-adjusted reimbursement will continue to grow. For those providers willing to take on increased financial risk under the QPP, they should consider the Advanced APM track that allows for a potential of a 5% increase in Medicare reimbursement. Providers can monitor the CMS Innovation Center's website to find out the latest information on new APMs, including how to participate.

Physicians, non-physician practitioners, and other stakeholders should consider the economic and legal ramifications of participating in MIPs, APMs, and Advanced APMs. To assist in this, Ober|Kaler will provide in-depth resources through our QPP Perspective Series, which will be a series of articles aimed towards the individual stakeholders impacted by the QPP that will be rolled out in the near future.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Ober Health Law | Attorney Advertising

Written by:

Baker Ober Health Law

Baker Ober Health Law on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.