While it may seem daunting to consider all the 2017 changes while in the midst of the current 2016 PQRS reporting period, consider it we must. The 2015 Medicare Access and CHIP Reauthorization Act (MACRA) ended the sustainable growth rate (SGR) averting annual congressional action necessary to stop negative adjustments to the Medicare Physician Fee Schedule (PFS). As part of the transition CMS mandated a transition from payment based on volume of billed services to quality metrics.  On October 14th, CMS released the final rule for the revamped Quality Payment Program (QPP). The executive summary is helpful and certainly less dogmatic than the 2,400+ page final rule so if time permits, here is the link for a quick read. From this document…  “MIPS is a new program for certain Medicare-participating eligible clinicians that will make payment adjustments based on performance on quality, cost and other measures, and will consolidate components of three existing programs—the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program.”  

Here are several quick items you need to know. 

Impacted Providers

If your charges to Medicare exceed more than $30,000 or your practice sees annually more than 100 Medicare patients, you are part of the QPP.

• Physician
• Physician assistant
• Nurse practitioner
• Clinical nurse specialist
• Certified registered nurse anesthetist

The impacted provider list will expand in future years but for now the above named provider types need to understand the impact of the QPP.

Staged Penalty Escalation

Reporting in a given year impacts payment two years out. Here is quick schedule to demonstrate:

Data Year Reported Fiscal Year Impact Potential Adjustment
PQRS2016 2018 -2% to -4% *1
QPP2017 2019 -4%
QPP2018 2020 -5%
QPP2019 2021 -7%
QPP2020 2022 -9%

So, reporting in a given year impacts payment two years out and the penalty is escalating. In other words, delaying participation will only hurt more, year after year, until the maximum negative adjustment hits in 2022. There is a surplus in which elevated performers can partake but for those new to the game, averting penalty is the initial goal.

Flexible Participation Status

Since the start of the original quality programs (i.e., Meaningful Use, Value-based Modifier, Physician Quality Reporting System, and Certified Electronic Health Record), partial participation was never an option. Under the new QPP, it is. Here are the options.

2017 Reporting Option *2 Adjustment Outcome
A. 1 measure, partial time period Neutral (i.e., avoid penalty)
B. 6 measures, 90 consecutive days Neutral or positive
C. 6 measures for the full year Neutral or larger positive

To be clear, options A-C all avoid penalty… as long as you submit data accurately and completely. However, options B and C, assuming elevated performance on selected measures, avoids penalty and affords opportunity to receive additional reimbursement. The waters are still murky in terms of how much additional money. Regardless, if you can make options B or C work for you and your practice, it is a good idea if only because there is no indication partial participation is an option after 2017 data is submitted.

Fewer measures to report

If the preceding Flexible Participation Status section seemed in error by mentioning only 6 measures (vs. the historic 9), here is some good news. The new QPP program requires only 6 vs. 9 measures. Measure groups have been retired and the number of current measures has diminished from more than 400 to just under 250 *3 but certainly reporting less data will be easier and allow providers, theoretically, to elevate performance since the quality measures are fewer. If you work with a Qualified Clinical Data Registry (QCDR) there are more unique measures available and hopefully measures more meaningful and relevant to your specialty or clinical focus. The recommendation is to find 6 measures that positively impact your practice by benefiting your patients with elevated outcomes and places your practice in the most optimal position to outpace peers in terms of quality performance. Make no mistake, there will be winners and losers. Those who perform best make the most money. A significant percentage of health care providers will see downward spiraling payment from Medicare. You can avoid this but it requires proactive steps to make it happen.  

Advanced APM vs. MIPS

Everything described thus far in this article addresses the Merit-based Incentive Payment System (MIPS). However, a quick perusal of CMS QPP collateral indicates the most optimal payments are derived from participation in an Advanced Alternative Payment Model. The “APM” acronym is still what the feds use in their paperwork but these “AAPMs” are unique. Those being compensated with an AAPM “assume risk” and like most risk-based contracts this means a participating provider shares in the fiscal success or failure of the program. 

Most doctors don’t want to be payers; i.e., they don’t want to be compelled to curtail healthcare services in the name of cutting costs so they can achieve optimal “risk performance” which really means more money for them. In other words, there are thankfully too few providers willing to limit care to cut costs just so s/he can get a bigger bonus. But we digress…

At present, CMS estimates only 125,000 of the more than 500,000 potential participants might find themselves in an AAPM. Here is a quick list of current AAPMs but the feds make it clear more may be (are) forthcoming:

• Comprehensive End Stage Renal Disease Care Model (Two-Sided Risk Arrangements) 
• Comprehensive Primary Care Plus (CPC+) 
• Medicare Shared Savings Program Track 2 
• Medicare Shared Savings Program Track 3 
• Next Generation ACO Model

The AAPM is an option CMS is pushing as it aligns interests of the payer (i.e., the government) and providers inasmuch as diminished spending saves taxpayer dollars and makes providers more money (by limiting care/costs). This is sensible coming from a government program that has for too long compensated providers below acceptable payment floors. Remember though, the MIPS program (and the 6 measures) is a viable option for those providers or groups not wanting to pool success/failure with a larger entity or who simply want to focus on practicing medicine vs. playing the game of the insurance payer.


At the end of the day, CMS must curtail the runaway train that is the government’s healthcare cost vertical. The QPP is a significantly positive step forward because:

• Reporting is easier with fewer requisite measures. 
• Flexible participation in 2017 allows less experienced providers to start participating.
• Measure development is focusing on data capture that is less burdensome to providers.

There is so much more to discuss and learn but hopefully this brief overview makes this complex program a bit more palatable.  Dr. Louis Pasteur in 1854 was credited with saying “…fortune favors the prepared mind.”  Be prepared to make certain you and your practice perform favorably in the QPP. This is not just the new CMS compensation methodology, but as the past few decades of U.S. healthcare history demonstrates, what soon will be the protocol practiced by commercial payers as well.

1For 2016 reporting, if fewer than 10 providers, max penalty is -2% but if greater than 10 providers (based on value based modifier performance) could be up to -4%.

2Please ensure you review the Final Rule for the expanded requirements and details of the 2017 reporting options. This chart is a simplfied “quick glance” version.

3PQRS and QCDR entities have the most measure options. EHR and other reporting mechanisms have significantly fewer.