CMS Announces Process for Setting Performance Measures for Future Medicare Payments

December 29, 2015
Health Law Alert

On December 18th, the Centers for Medicare and Medicaid Services ("CMS") released a draft Measure Development Plan (the "MDP"), which describes the processes by which it will set the measurements that will soon drive payment adjustments to physicians and other clinicians. The MDP is a step toward the government's announced goal of tying at least 50% of Medicare payments to quality or value by 2018.

The Medicare Access and Children's Health Insurance Program Reauthorization Act of 2015 ("MACRA"), commonly referred to as the "doc fix" legislation, repealed Medicare Part B's sustainable growth rate reimbursement formula and replaced it with a pay-for-performance program called the Medicare Merit-based Incentive Payment System ("MIPS").1 Under MIPS, physicians and other clinicians such as physician assistants, nurse practitioners, and, in later years, physical therapists, clinical psychologists and others (collectively "clinicians") will receive performance scores in four categories, starting in CY 2017: quality, resource use, clinical practice improvement activities and meaningful use of certified EHR technology. The performance score will then be used to apply a negative, neutral or positive payment adjustment based on a prior performance period, with the first adjustments beginning in January 2019.2 Under MACRA, clinicians who opt to tie more of their reimbursement to value-based payment mechanisms through Medicare Alternative Payment Models ("APMs"), such as Medicare Accountable Care Organizations, will become eligible for additional financial incentives.

So what are the measures that will determine clinicians' performance scores (and accordingly, their reimbursement) under MIPS and APMs? CMS will follow its MDP to develop these measures. The MDP indicates CMS intends to build upon existing measurements used under the Physician Quality Reporting System, Value-based Payment Modifier, and Medicare EHR Incentive Program for Eligible Professionals (commonly called the "Meaningful Use" program). These programs will sunset under MACRA as these measurements become part of clinician's composite performance scores. The MDP also emphasizes continuing and intensifying ongoing efforts to share best practices for measurement development and the actual measures themselves across the private and public sectors, through stakeholder groups like the Measure Applications Partnership and industry associations.

The MDP is a plan for measure development, not a listing of proposed measures. That said, it offers a glimpse, consistent with the MACRA mandates, into the likely subject matter of the measurements. For example, the MDP calls for patient/caregiver experience surveys to continue, with a goal of implementing surveys specific to specialties, MIPS and ARMs. The MDP notes that care coordination will be part of clinical practice improvement measures, including timely communication of clinical information and test results among providers and to patients. The MDP anticipates that information on measurements under development will be made publicly available on a rolling basis.

CMS is soliciting public comment on the MDP through March 1, and will post the final MDP on the CMS website by May 1, 2016. The list of measures to be used for MIPS is to be published in the Federal Register no later than November 1, 2017, for the 2018 performance period, which will result in payment adjustments as of January 2019.

For further information, you may contact Angela Rust or your regular Hinshaw attorney.


The sustainable growth rate formula was a complex calculation of physician reimbursement that would have resulted in steep reimbursement cuts every few years.  Historically, Congress passed stopgap "doc fix" laws periodically, but did not revise the underlying payment system until MACRA was signed into law in April 2015.

See Section 1848(q)(1)(B), (q)(5)(A) and (q)(6)(A) of the Social Security Act.