American Osteopathic Association

Advancing the distinctive philosophy and practice of osteopathic medicine

MACRA Frequently Asked Questions

faq-macra.jpgThese FAQs will be updated as new information becomes available.

What is MACRA?

MACRA is the acronym that refers to the Medicare Access and CHIP Reauthorization Act of 2015, legislation that was signed into law on April 16, 2015. The new payment program that MACRA created is sometimes referred to as the Quality Payment Program (QPP).

What does MACRA do?


  1. Repealed the Sustainable Growth Rate (SGR) formula, which would have resulted in double-digit payment cuts in 2015.

  2. Replaced the SGR with a payment system that supports the U.S. Department of Health and Human Services' (HHS) goal of tying 90% of all Medicare fee-for-service to quality or value by 2018. Visit CMS Path to Value to learn more.

  3. Lays out two paths to participate in Medicare Part B: the Merit-based Payment System (MIPS) and Advanced Alternative Payment Models (APMs). This short video can provide the details.

How will MACRA impact my Medicare payments?

Following is a timeline for MACRA implementation and payment impact:

  • 2016 through 2019: MACRA establishes a 0.5% physician fee schedule update each year.

  • 2019 and onward: MACRA payments will be based on 1) which track you participate in, and 2) your performance.

How will I know what track to participate in?

Most physicians will report through MIPS in the first year of the program. CMS will determine which providers meet the requirements for the Advanced APM track. Physicians are not locked into their choice—they can switch between MIPS and APMs annually. Details on both MIPS and APMs will be subject to CMS’ final rule, which is expected in fall 2016.

The AOA will continue to provide updates as they occur. Visit the CMS website for additional information.

What is the Merit-Based Incentive Payment System (MIPS)?

The new Merit-Based Incentive Payment System is an enhanced Medicare fee-for-service payment system. It combines CMS’ meaningful use of electronic health records (MU), the physician quality reporting system (PQRS) and the value-based payment modifier (VBPM), and adds a fourth new performance category called clinical practice improvement activities (CPIA).

Physicians can report as a group or as individuals, and will receive scores for each performance category to determine their MIPS composite performance score. This composite score will be compared to those of their peers, and then physicians will receive bonuses or penalties based on where they fall in this comparison. The score will be based on performance in the following four weighted categories:

  • Quality – based on PQRS (50%)

  • Resource use – based on VBPM (10%)

  • Advancing Care Information (ACI) – based on EHR MU Incentive Program (25%)

  • Clinical Practice Improvement Activities (CPIA) –new (15%)

How will I be paid under MIPS?

MIPS will offer the potential to earn bonuses or penalties based on performance. Physicians will be rated on their performance in the above mentioned categories. Each year, CMS will define a performance threshold based on the scores of all participating physicians and groups. If your composite performance score is above the threshold, you'll get a bonus; if it's below the threshold, you'll get a penalty. If you don't report at all, you'll get the lowest possible score. Penalties and bonuses will be capped at amounts that initially increase in the first years of the program.

  • 2019: -4% penalty to +4% bonus with an exceptional performance bonus of up to +12%.

  • 2020: -5% penalty to +5% bonus with an exceptional performance bonus of up to +15%.

  • 2021: -7% penalty to +7% bonus with an exceptional performance bonus of up to +21%.

  • 2022-2024: -9% penalty to +9% bonus with an exceptional performance bonus of up to +27%.

  • 2025: -9% penalty to +9% bonus (no more ‘exceptional’ three times bonus).

  • 2026 and beyond: +0.25% annual increase.

What is an Alternative Payment Model (APM)?

Alternative Payment Models are payment systems that shift away from traditional volume-based fee-for-service payments to those that are value- or quality-based. There are many different approaches to alternative payment models. In initial MACRA regulation, six Advanced APM models are recognized under MACRA as qualifying for a new payment approach:

  • Comprehensive ESRD Care LDO Arrangement (CEC)

  • Comprehensive Primary Care Plus (CPC+)

  • Medicare Shared Savings Track 2 (MSSP2)

  • Medicare Shared Savings Track 3 (MSSP3)

  • Next Generation ACO Model (NextGen)

  • Oncology Care Model two-sided risk arrangement (OCM)

How will I be paid under the APMs?

MACRA incentivizes participation in qualifying Advanced APMs by exempting them from MIPS and its bonuses and penalties, and rewarding qualifying physicians with a 5% lump-sum bonus for each year that they participate from 2019-2024. From 2026 and beyond there will be a 0.75% bonus for physicians participating in qualifying Advanced APMs. While there is no penalty payment adjustment, all Advanced APMs must still use certified EHR technology, demonstrate value, and take on a certain level of two-sided financial risk. Providers in Advanced APMs must also maintain a certain amount of revenue under the Advanced APM:

  • 2019-2020 – 25% of all your Medicare revenue must be in Advanced APMs.

  • 2021-2022 – 50% of all your Medicare revenue must be in APMs, or 25% of all your Medicare revenue and 50% of your revenue from all payers must be in Advanced APMs.

  • 2023 and on – 75% of all your Medicare revenue must be in Advanced APMs, or 25% of all your Medicare revenue and 75% of your revenue from all payers must be in Advanced APMs.

It is also possible to partially qualify in an Advanced APM. Providers who partially qualify in Advanced APMs will not get the 5% APM annual bonus. Instead, providers in these APMs can voluntarily elect to participate in MIPS and receive a MIPS payment adjustment. If they choose not to participate in MIPS, they will have no payment adjustment for that year.

Which providers will be affected by MACRA?

MACRA will affect providers (physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse, anesthetists and groups that include any of these clinicians) who participate in Medicare Part B.

Are there any providers that will be exempt from participating in MACRA? 

Yes, the following providers will be exempt:

  • Those in their first year of Medicare Part B participation.

  • Those that meet low volume thresholds (based on Part B revenue or patient counts).

When does MACRA take effect?

CMS released a proposed rule to implement MACRA on April 27, 2016, and the AOA submitted a comment letter to CMS sharing concerns and recommendations about the new system. The final rule is anticipated to be released in the fall of 2016, with an anticipated implementation for 2019 payments based on 2017 performance.

What can I do now to be ready?

The AOA is committed to providing members with support and resources to help you navigate through MACRA. Since MIPS is the track that the majority of physicians will follow in MACRA’s first year, you can start preparing by assessing your performance under the current CMS quality programs (PQRS, MU and VBPM). In addition, you can review the CPIA measures in the proposed rule and identify ones that you can meet. Use the information you gather to find areas to focus on improving. Now is the time to make changes.