MACRA/Quality Payment Program - State Health Policy


The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) law eliminated the sustainable growth rate (SGR) formula that had previously been used to calculate Medicare payments to physicians and had resulted in repeated threats of severe payment cuts. MACRA provides a more predictable Medicare payment schedule for physicians and other clinicians while moving the payment system away from a volume-based system toward a system that rewards value. This new payment system is called the Quality Payment Program (QPP).

The Quality Payment Program (QPP), which went into effect on January 1, 2017, provides new tools and resources to physicians that participate in Medicare Part B. Physicians can choose how they want to participate based on their practice size, specialty, location, or patient population.

Under QPP, physicians can choose to participate in one of two payment tracks to earn additional increases in their Medicare payments in 2019—the Merit-Based Incentive Payment System (MIPS) or an Alternative Payment Model (APM). Physicians, or their practices, will have the opportunity to decide annually the program in which they will be participating.


MIPS builds on traditional fee-for-service payments by adjusting them up or down based on a physician’s performance in a new reporting system. MIPS combines several existing Medicare reporting programs; the Physician Quality Reporting System (PQRS), the Medicare EHR Incentive Program (also known as Meaningful Use), and the Value-Based Payment Modifier Program—and also adds in a new component, Improvement Activities.

Physicians participating in MIPS will earn a performance-based payment adjustment to their Medicare payment. The performance-based payment adjustment will be determined by their composite scores in these four weighted categories in 2018:

  • Quality = 50 percent
  • Cost = 10 percent
  • Improvement Activities = 15 percent
  • Advancing Care Information (formerly known as meaningful use) = 25 percent

The scores from the four categories are then combined to determine the physician’s MIPS Composite Performance Score (MIPS final score).


APMs are a new approach to paying for medical care that incentivizes quality and value. APMs can apply to a specific clinical condition, a care episode, or a population. Some APMs will qualify as “Advanced APMs.” Advanced APMs are a subset of APMs, which enable practices to earn more for taking on some risk related to their patients' outcomes. Physicians may earn a 5 percent incentive payment by going further in improving patient care and taking on risk through an Advanced APM.

ACP was involved in all stages of MACRA’s development and ascension into law and wants to see its successful implementation going forward. To date, the College has been aggressively advocating with CMS, through the rulemaking process, to simplify and improve many aspects of QPP’s implementation in both the MIPS and APM pathways.  ACP has developed extensive resources for its members in order to help them navigate all the twists and turns of QPP, including information on how to transition their practices.

Please visit ACP’s MACRA webpage for more information.


For questions, please contact Stacey Harms at