John Peabody, MD

A year ago this March, CMS achieved and surpassed their goal of tying 30 percent of payments to quality or value. While reaching the next milestone of 50 percent by 2018 is up in the air with changes to healthcare from a new administration, the current Secretary of Health and Human Services Tom Price voted in favor of valued-based care legislation and CMS has shown no indication of slowing down in its aggressive push towards this payment model.

Much of the framework guiding CMS’ aggressive push towards value-based care is an important piece of legislation signed into law in 2015 by former President Obama. The legislation, known as the Medicare Access and CHIP Reauthorization Act (MACRA) codifies how CMS will drive payments based on the quality of care delivered rather than the volume of services (e.g., procedures, visits, tests) provided. The legislation also creates the Merit-Based Incentive Payment System (MIPS), which combines the Physician Quality Reporting System (PQRS), Meaningful Use (MU) EHR incentive program, and Physician Value-Based Modifier into a single payment program.

MIPS measure providers in four performance categories: (1) Quality (2) Resource Use (3) EHR Meaningful Use and (4) Clinical Practice Improvement Activities (CPIA). CPIA is potentially a powerful idea that assesses physicians in categories such as population management, care coordination, practice assessment and steps taken to expedite future participation in alternative payment models. Interestingly, measurements of efficient resource utilization will triple in importance over the first three years of MIPS (from 10 to 30 percent weighting in the MIPS formula), which signals this is an added focus by CMS on the elimination of wasteful practices and procedures.

As it stands now, there are a number of requirements and implications for physicians to be aware of, though a reported 

 of independent physicians and staff are uncertain of what MACRA demands of them.

Embrace Individual Performance Data and Transparency

: The new MIPS system will focus on giving a single score to each individual physician. All MIPS scores and individual category scores will be posted on the CMS Physician Compare 

. The posted scores will show where providers fall in the distribution of their peers across the country.

To succeed under the new rules physicians will need to collaborate with their health systems and groups to start thinking of efficient ways to measure individual performance. Physicians will not only need to get used to getting measured but also know their performance will be available to consumers as CMS moves towards using transparency to improve performance.

 Fee-for-service reimbursements will be shifted away from and physicians should be aware of how this will affect their financials. In a time where practices see a vast number of patients per diem, the shift from quantity to quality service can be stunting. Under MIPS there is also potential for penalties to accrue over the years. By 2022, the potential revenue loss from groups that don’t report data could jump from two to nine percent, depending on how well physicians score in the four performance categories. 

On the other hand, physicians who score extremely high will also be eligible for a 27 percent payment bonus over a three-year period. There is an opportunity for physicians to improve their quality of care and relationships with patients, but that will require staying informed on the latest measurements and penalties enforced by CMS.

Identify the Tools Needed to Collect Data

: Most EHR and analytic platforms currently do not have the capacity to track improvement activities and workflows related to the documentation of participating in clinical practice improvement activities. Physicians will need robust platforms to track these activities and show how they have been able to improve their practice and improve their quality of care.



With the passage of MACRA, the federal government has made it clear that the move to value-based care is of great importance. One of the key implementations physicians will need to practice is performance improvement through training and measurement. Those physicians who embrace value-based payment early and develop a culture of transparency, accountability and adherence to evidence-based guidelines with their organizations stand a much better chance of thriving through this transition.

is President and founder of QURE Healthcare, which had its genesis in his long academic career dedicated to measuring and improving the quality of care. Dr. Peabody, a Professor at the University of California San Francisco, is an internationally recognized leader in clinical measurement, health policy, health systems, and evidence-based quality of clinical care. For almost two decades, he has examined how health systems affect, and potentially improve, care quality and patient outcomes. His leadership in this arena has led to his placement on numerous high level appointments including the Institute of Medicine, Blue Ribbon Panels and World Health Organization task forces. He has also testified before Congress on these issues.

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A reported 84 percent of independent physicians unsure what MACRA demands of them. Here's three things to know about complying with it.

Author | John Peabody, MD

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