CMS Releases Final Rule for Implementation of the New Quality Payment Program


On October 14, 2016, the Centers for Medicare & Medicaid Services (CMS) finalized its policy implementing the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM) incentive payment provisions in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), collectively referred to as the Quality Payment Program(QPP).  The QPP rewards the delivery of high-quality patient care through two avenues: Advanced Alternative Payment Models (Advanced APMs) and the Merit-based Incentive Payment System (MIPS) for eligible clinicians or groups under the Physician Fee Schedule (PFS). 

The final rule includes several modifications that offer flexible options to transition into the QPP.  The improvements provide support for small and independent practices; reduce the performance reporting period for the first year, and strengthen movement towards Advanced Alternative Payment Models by considering potential new opportunities such as the Medicare ACO Track 1+ and new episode payment models that build on the Bundled Payments for Care Improvement (BPCI) initiative.  For MIPS, the final rule sunsets payment adjustments in 2018 for the 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, while maintaining the quality, cost, and use of certified EHR technology (CEHRT) components.  The final rule also establishes incentives for participation in certain APMs and includes the criteria for use by the Physician-Focused Payment Model Technical Advisory Committee (PTAC) in making comments and recommendations on physician-focused payment models (PFPMs).  The AUA successfully advocated for many of the changes in the final rule.

Accompanying the announcement of the final rule is a new Quality Payment Program website, which explains the new program and helps clinicians easily identify the measures that are most meaningful to their practice or specialty. The final rule has a 60-day comment period and will take effect on January 1, 2017.

Following are the major changes in the final rule.

2017 Transitional Year

  • CMS has designated calendar year (CY) 2017 as a transitional year with 2019 as the MIPS payment year, and finalized the four options that clinicians may choose from to submit MIPS data.  

Low Volume Threshold

  • CMS increased the low-volume threshold for MIPS exclusion from $10,000 to $30,000 billed Medicare Part B allowed charges or provide care for 100 or fewer Part B-enrolled Medicare beneficiaries.

Small Practices

  • For 2017, many small practices will be excluded from new requirements due to an increase in the low-volume threshold.
  • As mandated by MACRA, $20 million each year for five years is available to train and educate MIPS eligible clinicians in small practices, rural areas, and practices located in geographic health professional shortage areas (HPSAs) through contracts with quality improvement organizations (QIOs), regional health collaboratives, and others to offer guidance and assistance to MIPS eligible clinicians in practices of 15 or fewer MIPS eligible clinicians.

MIPS Reporting Period

  • CMS finalized a minimum MIPS performance period of any 90 continuous days during CY 2017 (January 1 through December 31) for all measures and activities applicable to the integrated performance categories, instead of the proposed full calendar year. 

Data Completeness Criteria

  • For the transition year of MIPS, CMS finalized a 50 percent data completeness threshold for claims, registry, QCDR, and EHR submission mechanisms, down from the 90 percent reporting threshold for all patients.
  • CMS will increase the data completeness threshold to 60 percent starting in CY 2018.

MIPS Performance Categories


  • For full participation in the quality performance category, clinicians must report on six quality measures, as proposed including an outcome measure or one specialty-specific or subspecialty-specific measure set.
  • CMS did not finalize its policy for clinicians to report one cross-cutting measure.
  • The quality performance category will account for 60 percent of the total composite score, instead of 50 percent as proposed.
  • Groups using the web interface must report 15 quality measures for a full year.
  • Groups in APMs qualifying for special scoring under MIPS, such as Shared Savings Program Track 1 or the Oncology Care Model must report quality measures through your APM. You do not need to do anything additional for MIPS quality.

Improvement Activities

  • For this new category, CMS reduced the number of activities that clinicians must attest to in order to achieve full credit from 6 medium-weighted or 3 high-weighted activities to 4 medium-weighted or 2 high-weighted activities to receive full credit in this performance category in CY 2017.
  • For small practices, rural practices, or practices located in geographic health professional shortage areas (HPSAs), and non-patient facing MIPS eligible clinicians, CMS will reduce the requirement to only 1 high-weighted or 2 medium-weighted activities.
  • CPIA will account for 15 percent of the total composite score, as proposed.
  • Participants in certified patient-centered medical homes, comparable specialty practices, or an APM designated as a Medical Home Model will automatically earn full credit. 
  • Participants in certain APMs under the APM scoring standard will automatically receive points based on the requirements of participating in the APM. For all current APMs under the APM scoring standard, this assigned score will be full credit. For all future APMs under the APM scoring standard, the assigned score will be at least half credit

Advancing Care Information

  • In the final rule, CMSreduced the total number of required measures from proposed 11 to 5 (Security Risk Analysis, e-Prescribing , Provide Patient Access, Send Summary of Care and Request/Accept Summary of Care).
  • Reporting on all 5 required measures would earn the MIPS eligible clinician 50 percent. 
  • Reporting on the optional measures would allow a clinician to earn a higher score.
  • For the transition year, CMS will award a bonus score for improvement activities that utilize CEHRT and for reporting to public health or clinical data registries.
  • As proposed, the ACI performance category will account for 25 percent of the performance score.

Cost (Resource Use)

  • For the transition year, CMS finalizing a weight of zero percent for the cost performance category in the final score, and MIPS scoring in 2017 will be determined based on the other integrated MIPS performance categories (quality, advancing care information and improvement).
  • CMS also will finalize 10 episode-based measures that were previously made available to clinicians in feedback reports and met standards for reliability.
  • Starting in the 2018 performance year, the cost performance category contribution to the final score will gradually increase from 0 to the 30 percent level required by MACRA by the third MIPS payment year of 2021.

Advanced Alternative Payment Models

  • CMS modified the proposed definition of APM Entity to no longer require a direct agreement with CMS in all cases. Instead CMS is defining an APM Entity to mean an entity that participates in an APM or payment arrangement with CMS or another payer, respectively, through a direct agreement with CMS or the other payer, or through federal or state law or regulation.
  • CMS also finalized the definition of Advanced APM Entity to mean an APM Entity that participates in an Advanced APM or Other Payer Advanced APM with CMS or a non-Medicare other payer, respectively, through a direct agreement with CMS or the payer or through federal or state law or regulation.
  • CMS finalized the proposed criteria for Advanced and Other Payer Advanced APMs beginning in 2021, requiring use of quality measures comparable to MIPS, use of CEHRT and to take on more than nominal risk.
  • CMS is changing the financial risk criterion by eliminating the marginal risk components of the nominal amount standard.
  • As proposed, CMS will require that at least 50 percent of eligible clinicians use CEHRT, but will not increase the threshold to 75 percent in 2018.  CMS will consider making any potential changes to the threshold through future rulemaking.
  • CMS will release the 2017 list of Advanced APMs no later than January 1, 2017.
  • CMS is exploring development of a Medicare ACO Track 1 Plus (1+) in 2018 that would be voluntary for Track 1 ACOs seeking to share savings for the first time with less downside risk than Track 2 and 3 ACOs, but have sufficient financial risk to qualify as an Advanced APM. CMS will announce more information about the ACO Track 1 Plus model in the future.
  • CMS is finalizing two paths for an APM to meet the Advanced APM nominal amount standard. 
  • CMS is not finalizing the marginal risk and MLR requirements as proposed for year 1 for Advanced APMs.  With respect to Other Payer Advanced APMs, the marginal risk and MLR requirements will be finalized for performance year 2019.

AUA staff will continue to review the final rule and provide further analysis. For more information, please contact us at R&