97% of physicians to avoid penalty under 2018 MACRA rule, according to CMS projections

December 01, 2017
Area(s) of Interest: MACRA 

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule that will make changes in the second year of the Quality Payment Program as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Though not perfect, the California Medical Association (CMA) is pleased that CMS has listened to physician feedback and made changes that will significantly reduce their administrative burdens, including providing additional accommodations for small and rural practices, allowing virtual groups, and providing bonus points for physicians who treat complex patients, such as dual eligibles, who now constitute nearly 40 percent of California’s Medicare population.

CMS now estimates that 97 percent of eligible physicians will avoid a penalty in 2020 for the 2018 reporting year, and that 73 percent of physicians will be completely exempt from MACRA’s Merit-Based Incentive Payment System (MIPS).

While CMS unfortunately eliminated the “pick your pace” transition program for 2018, the agency provided extensive new accommodations for small practices with 15 or fewer clinicians, including:

  • Significant expansion of the low-volume threshold exemption. Physicians with $90,000 or less in Medicare Part B allowed charges OR 200 or fewer Medicare Part B patients will be exempt from MIPS.

  • Five automatic bonus points to final MIPS score for small practices.

  • Allows physicians to form virtual groups, so small practices can join together to report on MIPS requirements as a collective entity.

  • Three automatic bonus points for reporting on a quality measure, regardless of whether it meets data completeness.

  • Exempts small practices from All-Cause Readmission Measure

  • Creates new hardship exemption from the electronic health records (EHR) category (Advancing Care Information)

Since the passage of MACRA, CMA and the American Medical Association (AMA) have been actively engaged with CMS, urging the agency to use all regulatory flexibility to further reduce reporting burdens on physicians. While CMA appreciates CMS’ responsiveness to physician concerns, we continue to urge CMS to even further simplify the program.

CMA is advocating for changes such as reducing the number of Quality and Advancing Care Information (EHR) measures, expanding the adjustments for complex patients, removing the requirement to report all payer data and exempting physicians within five years of retirement. CMA will also urge CMS to hold EHR vendors more accountable, particularly for interoperability. And, CMA will continue to advocate for reasonable financial risk requirements for alternative payment models, particularly medical homes, and to expand the types of models allowed under the program.

Other highlights from the final rule include:

MIPS Changes

  • Automatically exempts physicians impacted by California wildfires.

  • Provides five bonus points for physicians who treat complex patients (dual eligibles).

  • Provides credit for “improvement” in the quality and cost categories.

  • Delays implementation of the facility-based measurement option.

  • Includes Part B Drug costs in calculations (CMA opposes this and is pursuing a legislative fix).

EHR/Advancing Care Information

  • Allows use of 2014 certified EHR technology. CMS will not mandate physicians update their EHRs in 2018.

  • Provides more bonus points.

  • Permits physicians to report on Modified Stage 2 measures in 2018 instead of the Stage 3 measures that are not applicable to physician practices.


  • Consumer Assessment of Healthcare Providers and Systems survey continues to be optional.

  • Includes new and modified specialty society measure sets. Cross-cutting measures removed from most specialty sets.

  • Quality category weight will be 50 percent of total score.

  • Increases the reporting threshold from 50-60 percent of applicable patients.

Cost Category

Over CMA and AMA’s opposition, CMS has adopted the following:

  • Category weight goes from 0 to 10 percent in 2018.

  • Cost scores continue to be partially based on per patient cost and total spending related to a hospital admission.

  • CMS will continue to work on episode-based cost measures.

Improvement Activities

  • Allows reporting based on simple physician attestation.

  • Broadens existing activities and adds new ones.

Alternative Payment Models

  • Revenue standard for nominal financial risk to remain at 8 percent of revenues

  • The lower financial risk standard for medical homes will be phased-in more gradually from 2.5 percent to 5 percent.

  • Comprehensive Primary Care Plus models have access to lower risk standard as well.

To read the AMA summary of the final rule, click here.


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