2017 will bring the most substantial change to physician reimbursement in decades. We’ll see complex new legislation in the form of the Quality Payment Program which will impact the future of Medicare PFS (Physician Fee Schedule).

As of 2017, clinician reimbursement will fit into one of three main categories; MIPS, APM, and AAPM.

  1. MIPS (Merit-Based Incentive Payment System) – The largest category this will consolidate three existing programs: Medicare Meaningful Use (MU), Physician Quality Reporting System (PQRS), and Value-Based Modifier (VBM).
  2. APM (Alternative Payment Models) – An alternative to MIPS. Similar to a track 1 Medicare Shared Savings Program Accountable Care Organization.
  3. Advanced Alternative Payment Models (AAPM) – ESRD Seamless Care Organization, Accountable Care Organization, etc.

The diagram below illustrates these groups.




The limited scope of exceptions include clinicians who are:

  • New to Medicare
  • Bill Medicare less than $30,000 per year
  • See less than 100 Medicare beneficiaries per year


When Health and Human Services (HHS) responds to new legislation with large programs like this, they evaluate the impact of the program. Contained within the length MACRA final rule are the data used to evaluate this program’s impact.

When HHS estimates the economic impact this program will have, they largely focus on practice revenue. “On average, clinicians’ Medicare billings are only about 23 percent of total revenue, so even those MIPS eligible clinicians adversely affected by MIPS would rarely face losses in excess of 3 percent of revenues,” which is the the HHS standard for determining whether an economic effect is “significant.” Granted, some specialties do not fall within the realm of average. For example, the typical nephrology practice relies on Medicare for a substantially larger share of total practice revenue, often upwards of 60-70%.

It’s important to also consider the potential negative financial impact this program will have. Fortunately, in 2017, that impact is low. This is thanks in large part to Pick Your Pace.

Which includes three options:

  1. test the QPP
  2. participate for part of the year
  3. participate for the full year.


A fourth option is to participate in an AAPM. Regardless of which option will best fit your future, Medicare payment reform puts practices at a crossroads for quality measurement and reporting.

As 2017 starts up, we hope you’re prepared for a successful initiation of the Quality Payment Program. There’s a lot to understand about this complex new format and we’ll likely see long-lasting effects with the new physician reimbursement models.