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Understanding MACRA and MIPS

A man ponders the difference between MACRA and MIPS



Knowing how MACRA and MIPS work is crucial to a full understanding of how your practice is reimbursed under Medicare. The two are closely intertwined: The Medicare Access and CHIP Reauthorization Act (MACRA) is the law that, among other changes, brought the Merit-Based Incentive Payment System (MIPS) into being. MIPS is a payment program through which CMS determines whether your practice receives an upward or downward payment adjustment based on performance metrics.

When MACRA took effect, it represented a major change for physicians. This level of disruption required many practices to rethink fundamental aspects of their business, including how best to enable the collection and submission of specific data points and whether to switch to a 2015 Edition Certified EHR system to support speed and accuracy in submissions and for other interoperability purposes. 

As MACRA’s longer-term impacts ripple across the industry, you may find you can benefit from understanding MACRA and MIPS and using reporting tools that make it easier to work with key data points related to your practice. For physicians seeking to gain greater insight into their MIPS scores, MIPS Advisory Services may be a useful resource. 

What is MACRA?

MACRA is an act that became law in April 2015. Among other things, MACRA increased Medicare funding, extended children’s health insurance programs, and impacted how Medicare providers are reimbursed by implementing measures to shift the basis for payments from a fee-for-service model to a value-based care model. 

As a result of MACRA, Medicare providers have two available paths under the Quality Payment Program to earn payment: advanced Alternative Payment Models (APMs) and the Merit-Based Incentive Payment System (MIPS). MACRA repealed the Sustainable Growth Rate (SGR) formula that formerly determined Medicare Part B reimbursement rates for physicians and replaced it with these models. 

Consider a few takeaways that may impact your practice:

  • MACRA combines parts of other regulations into MIPS, representing a shift from fee-for-service to value-based care reimbursement.
  • The inclusion of parts of the Medicare Electronic Health Record (EHR) incentive program reflects continually advancing trends in digitization, automation and interoperability.
  • MACRA promotes the collection, tracking, analysis and submission of key patient and practice data points by tying them to scores that determine reimbursement. 

Understanding MACRA can help you equip your practice with the right tools and frameworks to find trends in your data, work to improve patient care, and ease the burdens of data reporting. 

What is the purpose of MACRA?

MACRA was intended to improve the quality of patient care while constraining overall expenditures and promoting the use of technology to support these goals. Additional goals help support scalability and sustainability of high-quality care across the industry:

  • Improve patient outcomes through patient-centered Advanced APM and MIPS policies
  • Enhance clinician experience by providing a transparent program that includes easier tools
  • Promote a program that could be inclusive of different physician, practice and patient scenarios
  • Improve data and information sharing for analytical or feedback purposes
  • Ensure operational excellence in program implementation and development

MACRA supports a shift away from a fee-for-service model and toward a value-based care model. That means that physicians are incentivized to focus on measurable objectives related to outcomes rather than receive payments based on the volume of services. 

MACRA also aims to limit Medicare expenditures. For example, the legislation determines the baseline Medicare payment increases for clinicians. 

Additionally, MIPS payment adjustments are designed to curb spending program-wide. Reported scores determine whether providers receive a positive or negative payment adjustment. The 2022 performance year is the last year CMS is offering an exceptional performer bonus based on a provider’s overall MIPS score. The 2022 bonus will impact Medicare reimbursements in 2024.

Another upcoming change is the advent of MIPS Value Pathways (MVPs). This subset of measures and activities can be used in place of traditional MIPS to meet reporting requirements beginning in the 2023 performance year. The purpose of these new measures is to streamline reporting measures, connect scoring with physician specialty or public-health priority, and reduce reporting burdens by continuing to promote interoperability.  

How does MACRA work?

MACRA implemented new programs that impact the way Medicare providers are reimbursed. It repealed the former SGR formulas and replaced them with the Quality Payment Program (QPP), which includes APM and MIPS. The goal of those programs is for the healthcare industry to be able to deliver patient care more effectively, with a focus on outcomes, cost efficiencies and the use of technology. 

MIPS requires physicians to report on four performance indicators, each of which is weighted differently depending on the category and other factors, like the size of the practice or if it’s located in an underserved area. Scoring across the four categories determines your payment adjustment. 

Demanding reporting requirements may make it challenging for some practices to attain high scores. This is where platform and database technology can help you achieve your MIPS goals. Our MIPS solution is built into our 2015 Edition Certified EHR systems, EMA® and gGastro®, to help you gather, track, benchmark and submit your MIPS reporting data.

By collecting data within the flow of the exam, you can track your estimated MIPS composite score and benchmark your performance against your peers daily. Using integrated specialized registries, you can submit your data to CMS without the heavy documentation workload of manual reporting. 

Is MACRA mandatory?

MIPS is mandatory for many providers. However, some practices may qualify for a MIPS exemption, based on current guidelines for the 2022 performance year:

  • Newly eligible clinicians who enroll in Medicare for the first time during the performance year
  • Eligible clinicians and groups that fall below specified charge amount or patient care volume thresholds
  • Eligible clinicians who participate in Advanced APMs

If you don’t qualify for a MIPS exemption, your income may be negatively impacted if you fail to meet the criteria. For example, with a maximum payment adjustment of up to 9% in 2024 for performance year 2022, a clinic that bills $1 million in Medicare could see a bonus or penalty of up to $90,000. To avoid the penalty, your practice needs to score at least 75 points. If you are required to participate in MIPS, reporting technology may be important to your practice’s success to facilitate supplying the required data points and monitoring your level of performance.  

What is MIPS?

MIPS is a payment system that allows CMS to adjust your payments based on the evaluation of four key performance indicators: quality, interoperability, cost and improvement activities. These performance indicators are a product of MACRA.

Scoring benchmarks are designed for larger practices with more than 15 clinicians. Smaller practices may qualify for different scoring breakdowns or reweighting of activities. 


In 2022, quality measures comprise 30% of your score, although the percentage could change based on certain factors. Six data collection types may apply:

  • Electronic Clinical Quality Measures (eCQMs)
  • MIPS Clinical Quality Measures (MIPS CQMs)
  • Qualified Clinical Data Registry (QCDR) measures
  • Medicare Part B claims measures
  • CMS Web Interface measures
  • The Consumer Assessment of Healthcare Providers and Systems (CAHPS) for MIPS Survey.

Promoting Interoperability

Promoting interoperability will make up 25% of your score in 2022, with certain factors that could change that percentage. For example, smaller practices that don’t submit interoperability data may be weighted more heavily across other categories.

By choosing an EHR system that includes a patient portal and integrates with other systems, you can help to promote patient engagement and faster, more cost-effective exchange of information. You’re required to use an EHR system that meets the 2015 Edition certification criteria, 2015 Edition Cures Update certification criteria or a combination of both. 

Improvement Activities

Improvement activities may make up 15% of your MIPS score. Practices with more than 15 clinicians need to attest to one of the following in their reporting:

  • Two high-weighted activities
  • One high-weighted activity and two medium-weighted activities
  • Four medium-weighted activities

High-weighted activities closely align with public health priorities. Medium-weighted activities are important, but not as closely aligned as high-weighted activities.

If you’re a small practice, the way you calculate points for each improvement activity may vary. 


Cost counts for 30% of your final score and can also change in certain circumstances. CMS uses Medicare Part A and B claims data to calculate cost performance, so physicians don’t have to submit any data for this category.

This category assesses the following:

  • Overall cost of care with a focus on the primary care
  • Cost of services related to hospital stays 
  • Costs for items and services provided, based on multiple procedural and condition-based episodes of care and 25 cost measures

Cost measures fulfill the goals of MACRA by encouraging lower costs across the industry. By aligning your practice’s operations with this value, you can help ensure your practice doesn’t experience a negative payment adjustment. 

MIPS-Eligible Physicians

MIPS-eligible physicians and other provider types are determined by CMS and may include new provider types each year. CMS may identify provider types based on industry trends, like increased reliance on advanced practice providers due to recruiting and retention challenges.

To illustrate this point, initial eligibility for MIPS included doctors of medicine, osteopathy, dental medicine and surgery, podiatry, optometry, and others. Chiropractors, physician assistants, nurse practitioners and other advanced practice providers made the list, too. 

Over time, this list has expanded. Certain dietitians and speech pathologists are now eligible. For 2022, clinical social workers and certified nurse-midwives have been added as eligible providers.

MIPS and MACRA — What You Can Do

By understanding MACRA and MIPS and how these programs may evolve, you can equip your practice to make data-driven decisions that improve patient health and cost-effectiveness. At ModMed, our powerful MIPS solution helps you track and report quality measures, and stay competitive. With this type of technology available to you and your staff, it’s easier to streamline workflows, gain valuable insights, and report performance data that helps you take control of your income. 

This blog is intended for informational purposes only and does not constitute legal or medical advice. Please consult with your legal counsel and other qualified advisors to ensure compliance with applicable laws, regulations, and standards.