Under pressure from organized medicine, the Medicare program has drastically simplified what physicians need to do next year to avoid a penalty in 2019 under the Medicare Access and CHIP Reauthorization Act (MACRA).

The 2015 law created a complicated framework called the Quality Payment Program (QPP) that shifts reimbursement from fee-for-service (FFS) to pay-for-performance. The new system debuts in 2017, and how physicians perform then will determine whether they earn bonuses or penalties 2 years down the line.

The Centers for Medicare & Medicaid Services (CMS) issued its proposed regulations for MACRA in April, and the final version won't surface until October or November. Fearing that their members wouldn't have enough time to master the rules by January, the American Medical Association (AMA), the American College of Physicians, the American Academy of Family Physicians, and other societies asked the government to delay the kick-off until July 2017.

Medicare isn't delaying the new payment system outright, but it promises to do something close to that. Today, CMS acting administrator Andy Slavitt announced in his blog that his agency would give physicians four MACRA options for 2017 that would let them pick their own pace of implementation — a very slow pace, if they choose. And each one would steer clear of a penalty in 2019.

Physicians Can Merely "Test" the New System Next Year

The options play off two reimbursement tracks in the QPP. The default track that initially will encompass the vast majority of physicians is the Merit-Based Incentive Payment System (MIPS). It combines three existing pay-for-performance incentive programs: meaningful use of electronic health records (EHRs), the Value-Based Payment Modifier, and the Physician Quality Reporting System (PQRS). Physicians will receive a bonus or penalty based on their composite score across the performance categories of quality of care, cost of care, clinical practice improvement, and meaningful use of EHRs, now called advancing care information.

In 2019, MIPS bonuses and penalties will be as high — or low — as 4% percent of Medicare FFS revenue and increase to 9% in 2022 and beyond. CMS initially estimated that most physicians in groups of 24 or less in MIPS would incur a penalty, but qualified the projection as a bit fuzzy.

The Advanced Alternative Payment Models (Advanced APMs) is the other payment track for physicians. These APMs earn a lump sum bonus of 5% a year as long as they assume serious financial risk under their particular model. Examples of Advanced APMs include next-generation accountable care organizations, Comprehensive Primary Care Plus, and track 3 of the Medicare Shared Savings Program. Physicians participating in Advanced APMs are exempt from MIPS and its penalties.

The first MACRA option announced by Slavitt today, an option dubbed "test the QPP," allows physicians in MIPS to avoid the 2019 penalty by merely reporting some quality and cost data — "some" is undefined for now — in 2017. Slavitt wrote that this option "is designed to ensure that your system is working and that you are prepared for broader participation in 2018 and 2019 as you learn more."

Under the second option, physicians in MIPS can submit quality and cost data for just part of 2017, and the performance period could begin later than January 1. Besides avoiding a penalty, these physicians could qualify for a small bonus in 2019.

Submitting performance data for the full calendar year in 2017 is the third option, and Slavitt expects that many practices will be able to do this successfully.

The fourth option is to join an Advanced APM, which, like the third option, has been available to physicians all along.

Slavitt said that the final regulations for MACRA will flesh out the details of the agency's "pick your pace" plan.

In a news release today, AMA president Andrew Gurman, MD, said that his group "strongly applauded" the government for listening to physicians' concerns about the timetable originally proposed for MACRA and adopting a "thoughtful and flexible approach."

"The AMA believes the actions that the administration announced today will help give physicians a fair shot in the first year of MACRA implementation," said Dr Gurman. "This is the flexibility that physicians were seeking all along."

More information about today's announcement is available on the CMS website.

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