MACRA and MIPS: New Regulations in Medical Practices

Medicare and Medicaid Services (CMS)
Medicare and Medicaid Services (CMS)

The healthcare sector is evolving at a great pace and new regulations keep making their way into it, along with new related acronyms. Two recent acronyms that have emerged in healthcare are MACRA and MIPS. These have become a prominent addition to the medical practices and to follow them properly it’s important that you understand the regulations well. Lately there has been significant changes regarding how the medicare pays for physician services. MACRA and MIPS have a significant impact on many health plans.

Rising costs and declining revenue is quite evident in healthcare and the factors contributing to it include increased demand for quality, lack of resources, uncertainty in healthcare and many more. Statistics suggests that 60% of personal bankruptcies in the U.S. owes to the medical bills. There has been a steep rise in health insurance premiums over the last decade but the wages haven’t increased to match with it. In attempt to find a remedy to the situation, new regulations have been introduced and the first step in following them is to understand them properly.


MACRA (Medicare Access and CHIP Reauthorization Act) replaced the ongoing Medicare reimbursement schedule and introduced a new pay-for-performance program which focused on value, quality and accountability. According to the Centers for Medicare and Medicaid Services (CMS), MACRA brings a new payment framework which rewards health care providers for providing better services, and not for more services. CMS, which administered this program, is a federal government agency responsible for administering all the major healthcare programs of the nation. CMS mainly aims at healthier people, better care and smarter spending. MACRA was signed into law on April 16, 2015 through bipartisan legislation, which shows its significance in the U.S healthcare.

Under MACRA, parts of the Physician Quality Reporting System (PQRS), the Medicare Electronic Health Record (EHR) incentive program and Value-based Payment Modifier (VBPM) are combined into one single program know as the MIPS or the Merit-based Incentive Payment System.


MIPS (Merit-based Incentive Payment System) determines medicare payment adjustments. Eligible professionals may get a payment penalty, payment bonus or no payment adjustment on the basis of composite performance score. There are four performance categories that decide Composite Performance Score:

  • Resource use
  • Quality
  • Meaningful use of certified electronic health records (EHR) technology
  • Clinical practice improvement activities

MIPS measures the eligible providers annually under four performance categories and derives a MIPS score between 0 to 100. This score has a significant impact on the Medicare reimbursement of the provider. The contribution of each category is:

  • 10% for resource use
  • 50% for quality (PQRS/VBM)
  • 25% for Meaningful Use
  • 15% for clinical practice improvement

Eligible professionals get the adjustments based on their base rate of Medicare Part B payment. An additional annual adjustment of up to 10 percent is given to those who score in top 25 percent. The government introduced MACRA and MIPS to control the dire situation in healthcare and is changing the Part B reimbursement through a new framework to reward the providers based on the patient’s view of quality.

MIPS score is very significant for healthcare providers and they must try to get favorable scoring if they do not want to lose portions of their Medicare Part B payments. MIPS, the payment method formed under MACRA, will go into effect in 2019.

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