Medicare Program: Merit-Based Incentive Payment System and Alternative Payment Model Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models


The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repeals the Medicare sustainable growth rate (SGR) methodology for updates to the physician fee schedule (PFS) and replaces it with a new approach to payment called the Quality Payment Program that rewards the delivery of high-quality patient care through two avenues: Advanced Alternative Payment Models (Advanced APMs) and the Merit-based Incentive Payment System (MIPS) for eligible clinicians or groups under the PFS.  This final rule with comment period establishes incentives for participation in certain alternative payment models (APMs) and includes the criteria for use by the Physician-Focused Payment Model Technical Advisory Committee (PTAC) in making comments and recommendations on physician-focused payment models (PFPMs).  Alternative Payment Models are payment approaches, developed in partnership with the clinician community, that provide added incentives to deliver high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population.  This final rule with comment period also establishes the MIPS, a new program for certain Medicare-enrolled practitioners. MIPS will consolidate components of three existing programs, the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals (EPs), and will continue the focus on quality, cost, and use of certified EHR technology (CEHRT) in a cohesive program that avoids redundancies. In this final rule with comment period we have rebranded key terminology based on feedback from stakeholders, with the goal of selecting terms that will be more easily identified and understood by our stakeholders.

Of particular interest is Table H: Finalized Improvement Activities Inventory that identifies: 1. Expanded Practice Access that increases where and when practice occurs; 2. Population Management  that a. increases options for FQHC reporting on services including collaboration with key partners and stakeholders to implement evidence-based practices; options to improve healthcare disparities w/resources identified by CMS: such as: Learning and Action Networks; Quality Innovation Networks; Quality Improvement Organizations; Million Hearts Cardiovascular Risk Reduction Model Campaign; b. proactively manage chronic and preventive care through reminders and outreach utilizing community health workers to alert and educate patients about services due and/or routine medication reconciliation;  c. Integrate a pharmacists into the care team to help manage medications to maximize efficiency, effectiveness and safety – Reconcile and coordinate medications and provide medication management across transitions of care settings and eligible clinicians or groups. 3. Care Coordination  develop pathways; including community resource guides to neighborhood/community-based resources to support patient health goals that include links to community based chronic disease self-management support programs, exercise programs and other wellness resources.

The CMS Equity Plan for Improving Quality in Medicare Centers for Medicare & Medicaid Services Office of Minority Health September 2015

  • Priority 1: Expand the Collection, Reporting, and Analysis of Standardized Data
  • Priority 2: Evaluate Disparities Impacts and Integrate Equity Solutions Across CMS Programs
  • Priority 3: Develop and Disseminate Promising Approaches to Reduce Health Disparities
  • Priority 4: Increase the Ability of the Health Care Workforce to Meet the Needs of Vulnerable  Populations
  • Priority 5: Improve Communication and Language Access for Individuals with Limited English Proficiency and Persons with Disabilities
  • Priority 6: Increase Physical Accessibility of Health Care Facilities

The foundation for addressing each of the plan’s priorities includes the following interconnected principles that guide CMS’ efforts to achieve health equity:

  1. Increasing understanding and awareness of disparities;
  2. Developing and disseminating solutions; and
  3. Taking sustainable action and evaluating progress.


CMS Coverage to Care(C2C)

From Coverage to Care (C2C) is an initiative designed by CMS to help people understand their health coverage and connect to primary care and preventive services, so they can live a long and healthy life. C2C resources are available in multiple languages to help people in their journey from coverage to care.

Lots of resources and info-graphics

Ashley Peddicord-Austin, M.P.H.  Office of Minority Health (OMH)

Centers for Medicare and Medicaid Services (CMS)

Phone: 410-786-0757




Issue Brief

July 2016

How States Can Fund Community Health Workers through Medicaid to Improve People’s Health, Decrease Costs, and Reduce Disparities

By: Ellen Albritton

Community health workers (CHWs) provide many different services, from helping people buy health insurance and navigating the health care system to leading community-level health education classes. CHWs are especially valuable in vulnerable, underserved communities that struggle with multiple barriers to good health and health care, such as those with limited English proficiency, unmet social needs, and scarcity of reliable transportation.

Unfortunately, a lack of sustainable funding often prevents states from expanding CHW programs and integrating them into the health care system. Reimbursing CHW services through Medicaid is one way to address these challenges. This brief shows advocates how to work with CHWs and their state to establish more sustainable funding in ways that are best suited to that state.

In this brief (PDF), we:

  • Explain how community health workers improve people’s health, reduce health care costs, and address barriers to care
  • Discuss key questions regarding sustainable funding through Medicaid for states that want to start or expand such programs
  • Present case studies of three states (Massachusetts, Minnesota, and New Mexico), detailing how they fund, train, certify, and integrate CHW programs


FOR IMMEDIATE RELEASE                                     Contact: CMS Media Relations

October 31, 2014                                                   (202) 690-6145 or

CMS releases final payment rules for the Medicare program

New policies focus on value, improve how care is provided, and increase transparency of information on quality 

WASHINGTON – Over the past several days, the Centers for Medicare & Medicaid Services (CMS) released final rules outlining how Medicare will pay major health care providers and suppliers in 2015. Important provisions of the Affordable Care Act that reward higher quality, patient-centered care at a lower cost are being implemented by these rules. The final rules include Medicare payments to physicians and non-physician practitioners, hospital outpatient departments, ambulatory surgical centers, home health agencies and dialysis facilities that treat patients with end-stage renal disease.

“Health care systems across the country are shifting their focus from volume of services to better health outcomes for patients, coordinating care, and spending dollars more wisely,” said CMS Administrator Marilyn Tavenner. “These rules are a part of the broader strategy driving greater value in health care. By collaborating and building on best practices across the health care system, we can deliver the results of higher quality care and lower costs that consumers, providers, purchasers, and businesses deserve.”

The rules reflect a broader Administration-wide strategy to move our health care system to one that values quality over quantity and spends taxpayer dollars more wisely by finding better ways to deliver care, pay providers, and distribute information:

Empowering providers to deliver coordinated and integrated care, transition to new models of care, and improve the doctor-patient relationship.

  • Better coordination of care for beneficiaries with multiple chronic conditions. Often, seniors with multiple conditions see a number of specialists. In those cases, extra physician effort is required to coordinate a care regimen that prevents over-treatment or duplicative tests. Historically, Medicare has not paid for services that support care management but are not delivered face-to-face, such as telephone check-ins with nurse care managers, in the clinical setting. Under this year’s rulemaking, the Medicare Physician Fee Schedule will include a new chronic care management fee beginning next year. This separate payment for chronic care management will support physician practices in their efforts to coordinate care for Medicare beneficiaries with multiple chronic conditions. This helps improve the way care is provided by supporting clinicians coordinating care for patients, including outside of regular office visits.

Aligning the way providers are paid to reward value rather than volume.

  •  Paying providers for quality, not quantity of care. In 2015 Medicare is continuing to phase in the Value-based Payment Modifier, which adjusts traditional Medicare payments to physicians and other eligible professionals based on the quality and cost of care they furnish to beneficiaries. Those adjustments translate into payment increases for providers who deliver higher quality care at a better value, while providers who underperform may be subject to a payment reduction.
  • Providing incentives to hospital outpatient departments and facilities to deliver efficient, high-quality care. The Hospital Outpatient Prospective Payment System/Ambulatory Surgical Center (OPPS) rule includes provisions that promote greater packaging of payments for items and services rather than making separate payments for each individual service. For example, a new comprehensive Ambulatory Payment Classifications payment policy is being implemented in CY 2015 to make a single payment for all related hospital items and services provided to a patient receiving certain device-dependent procedures, such as insertion of a pacemaker, rather than separate payments for each supportive service, such as routine tests and diagnostic procedures.


Increasing the availability and accessibility of information on quality, utilization and costs for effective, informed decision-making.


  • Better information for providers to understand the total scope, cost, and quality of care that the Medicare beneficiaries they serve receive. To assist physician groups and physicians in improving quality of care for their Medicare beneficiaries, CMS recently made Quality and Resource Use Reports available. The reports include information about the scope, cost and quality of care that is delivered to the Medicare beneficiaries they serve, both inside and outside of their practices. These reports include information on where beneficiaries are hospitalized and whether they were readmitted. Solo practitioners and group practices can use the reports to implement action steps that can improve care coordination and reduce the provision of unnecessary services, improving the quality, effectiveness, and efficiency of care delivered to Medicare beneficiaries.
  • Expand and add new measures to the Physician Compare website. The Physician Compare website allows consumers to search for reliable information about physicians and other health care professionals who provide Medicare services so they can make informed decisions about who delivers their care. CMS has finalized policies to significantly expand the quality measures available on this website by making group practice and individual physician-level measures available for public reporting, including patient experience measures, and measures collected by Qualified Clinical Data Registries. By making all of these measures available for public reporting, CMS can work to include a diversity of quality measures on the website while including only those measures that are most beneficial to consumers and best aid decision making.
  • New quality and performance measures for dialysis facilities. The End-Stage Renal Disease (ESRD) Prospective Payment System rule introduces new quality and performance measures for outpatient dialysis facilities. The rule incorporates in 2017 a Standardized Readmission Ratio, which assesses the rate at which ESRD dialysis patients return to an acute care hospital within 30 days of discharge from an acute care hospital, supporting the Administration’s efforts to reduce unnecessary hospital readmissions in all settings.


Additional CMS fact sheets on final payment rules released by CMS click here:

  • CY 2015 Physician Fee Schedule (CMS-1612-F)“Riders”
  • CY 2015 OPPS (CMS-1613-F) “Riders”
  • CY 2015 ESRD PPS System (CMS-1614-F) “Riders”
  • CY 2015 Home Health PPS System (CMS-1611-F) “Riders”:

Report to Congress: The Centers for Medicare & Medicaid Services’ Evaluation of Community-based Wellness and Prevention Programs under Section 4202 (b) of the Affordable Care Act


The Affordable Care Act Section 4106 ( Preventive Services)

Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop S2-26-12
Baltimore, Maryland 21244-1850

Center for Medicaid and CHIP Services
SMD# 13-002
ACA #25

RE: Affordable Care Act Section 4106
(Preventive Services)
February 1, 2013
Dear State Medicaid Director:

This letter provides guidance to states on section 4106 of the Affordable Care Act. Section
4106(b) establishes a one percentage point increase in the federal medical assistance percentage (FMAP) effective January 1, 2013, applied to expenditures for adult vaccines and clinical preventive services to states that cover, without cost-sharing, a full list of specified preventive services and adult vaccines. In that circumstance, the increase would apply to such expenditures whether the services are provided on a fee-for-service (FFS) or managed care basis, or under a benchmark or benchmark-equivalent benefit package (referred to as an alternative benefit plan).

The specified preventive services are those assigned a grade of A or B by the United States
Preventive Services Task Force (USPSTF), and approved vaccines and their administration,
recommended by the Advisory Committee on Immunization Practices (ACIP). The services
remain optional with one exception: effective January 1, 2014, the law requires that alternative benefit plans cover preventive services described in section 2713 of the Public Health Service Act as part of essential health benefits. Section 2713 includes, among others, the same services as those authorized for increased match under section 4106 of the Affordable Care Act.

The federal Agency for Healthcare Research and Quality supports the USPSTF, an independent panel of experts in prevention that makes recommendations on clinical preventive services on a graded scale. The Centers for Disease Control and Prevention supports the ACIP, a group of medical and public health experts that develops recommendations on how to use vaccines to control diseases in the United States. Both groups publish their recommendations. A list of the services that are eligible for the increased FMAP can be found on the following websites:

In order for states to claim the one percentage point FMAP increase for these services, states
must cover in their standard Medicaid benefit package all the recommended preventive services and adult vaccines, and their administration, and must not impose cost-sharing on such services. States’ utilization review and approval procedures should conform to USPSTF and ACIP Page 2 – State Medicaid Director periodicity or indications where specified. States should ensure that they have appropriate codes or modifiers available for providers to utilize a crosswalk from those codes and modifiers to the USPSTF and ACIP recommendations, and a financial monitoring procedure to ensure proper claiming for federal match.

The one percentage point increase to the FMAP under section 4106 applies only to certain
federal matching rates specified in section 1905(b) and section 1905(y) of the Social Security
Act (the Act). Specifically, for eligible services, section 4106 of the Act only applies to the
following FMAP rates, as long as the FMAP does not exceed 100 percent:

• Regular FMAP rates calculated in the first sentence of section 1905(b) of the Act.
• FMAP rates specified in the first sentence of section 1905(b) of the Act for the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and
American Samoa.
• The enhanced FMAP specified in section 1905(b) of the Act relating to services provided
to certain breast or cervical cancer patients.
• The increased FMAP rates for Medical Assistance for newly eligible mandatory
individuals specified at section 1905(y) of the Act. We note, that although the FMAP
indicated in section 1905(y)(1)(A) of the Act for calendar quarters in 2014, 2015, and
2016 is 100 percent, as indicated above, this FMAP may not exceed 100 percent.

We are adding new lines to the CMS-64 report to capture state expenditures incurred in the
provision of services authorized under section 4106. States should use these new line items to reflect expenditures eligible for the additional one percentage point. As with all services
reimbursed under Medicaid, states are required to maintain documentation supporting
expenditures claimed under these new line items. This documentation must contain the coding, crosswalk, and controls procedures discussed above and must be made available to the Centers for Medicare & Medicaid Services (CMS) upon request.

Overlap with Other Services
We recognize that provision of the preventive services described in section 4106 may occur at the same time as other services eligible for enhanced or increased FMAP rates not identified above. For example, family planning services may include USPSTF preventive services and ACIP approved adult vaccines, and their administration, furnished during a family planning visit.

Family planning services can be reimbursed at a 90 percent rate. In these cases, states should claim on the family planning line of the CMS-64 form, which is reimbursed at the 90 percent rate. If a state ordinarily claims these preventive services and adult vaccines as a separate service from the family planning service, it should continue to do so.

Certain USPSTF grade A or B preventive services and vaccine administration codes eligible for the one percentage point FMAP increase under section 4106 may also qualify as primary care services eligible for a temporary increase in the payment rates matched at 100 percent federal financial participation (FFP) for calendar years (CY) 2013 and 2014 per section 1202 of the Affordable Care Act. Under section 1202, the Medicaid rate in CYs 2013 and 2014 for such primary care services by or under the direction of an eligible physician will be the lower of the provider’s charges or the 2013 and 2014 Medicare rate respectively. FFP is available for 100 Page 3 – State Medicaid Director percent of the difference between the Medicaid rate as of July 1, 2009 and the increased rate.
Under section 1202, the state’s regular FMAP rate will be available for the portion of the rate
related to the July 1, 2009 base payment. An additional one percentage point will be available on that base amount under section 4106 of the Affordable Care Act. The following example illustrates the interaction of these two Affordable Care Act provisions.

Example. A state’s regular FMAP is 60 percent and under section 4106 of the
Affordable Care Act, the FMAP would be increased to 61 percent for certain affected
preventive services effective January 1, 2013. The portion of the state’s rate related to
the July 1, 2009 base payment for certain affected primary care preventive services is
$70. In 2013 the state increases the rate to $80 in accordance with section 1202 of the
Affordable Care Act. The $10 difference between the $70 July 1, 2009 Medicaid rate
and the increased rate of $80 is eligible under section 1202 of the Affordable Care Act for
100 percent FMAP. Prior to the application of the Affordable Care Act provisions, the
total federal funding for the $70 provider payment rate would have been $42 (60 percent
FMAP of $70). With the application of section 4106 and 1202 of the Affordable Care
Act, the total federal funding available would be $52.70, calculated as $42.70 (61% (60
percent FMAP plus one percentage point) of the $70 regular provider rate) plus $10 (100
percent of the difference between $80 (the increased provider rate) and $70 (the July 1,
2009 rate)).

Claiming the Increased FMAP in Managed Care

In order to be eligible for the one percentage point increased FMAP, states must make these
services available to those enrolled in a managed care delivery system as well as those in a FFS setting, and must ensure that beneficiaries have no cost-sharing liability for these services. States have the authority to claim an increased FMAP for preventive services whether provided in a FFS setting or in a managed care program that is reimbursed through capitation rates that meet the requirements for actuarial soundness in 42 CFR 438.6(c).

The portion of the capitated rate that is attributable to preventive services and upon which an increased match may be claimed, may be determined prospectively based upon historical FFS data or data from the managed care plans (if available). The portion of the capitation rate claimed at the increased FMAP must be attributable only to services meeting the definition for preventive services under this section. The data used to establish the portion of the capitation rate that can be claimed at the increased FMAP rate should be the most recent complete and validated historical data available, whether from FFS or the managed care plans. In order to claim the increased FMAP states may need to amend their managed care contracts to require delivery of these services in accordance with the statute.

State Plan Modifications

States seeking the one percentage point FMAP increase should amend their state plans to reflect that they cover and reimburse all USPSTF grade A and B preventive services and approved vaccines recommended by ACIP, and their administration, without cost-sharing. States should provide an assurance in the state plan indicating that they have documentation available to support the claiming of federal match for such services, as described earlier in this letter. States Page 4 – State Medicaid Director should provide an additional assurance stating that they have a method to ensure that, as changes
are made to USPSTF or ACIP recommendations, they will update their coverage and billing
codes to comply with those revisions. Please refer to the previously mentioned websites for
USPSTF and ACIP updates.

Additional Policy Development

Certain preventive services listed by the USPSTF when provided by non-licensed practitioners have traditionally not been covered by Medicaid due to regulatory requirements limiting practitioners of preventive services to either physicians or licensed professionals. Although section 1905(a)(13) of the Act contains broad language authorizing payment for preventive services recommended by a physician or other licensed practitioner, the implementing regulation at 42 CFR 440.130(c) currently limits preventive services to those provided by a physician or other licensed practitioner of the healing arts (within the scope of practice under state law).

Consistent with 4106(a), CMS proposed revisions to this regulation in the Notice of Proposed
Rule making which went on display in the Federal Register on January 14, 2013, giving states the ability to recognize unlicensed practitioners in the delivery of these services. Should this policy be finalized, states would be able to claim the one percentage point match for preventive services delivered by practitioners other than physicians or other licensed practitioners. Until that time, however, the increased match is available only for those services that are delivered in accordance with existing Medicaid regulations.

We are eager to work with states to facilitate the implementation of these preventive services that can improve the health of beneficiaries. As you continue to consider and implement measures aimed at strengthening prevention, we are available to provide technical assistance on prevention related topics if you email us at:

 If you have any questions regarding this letter, please contact Barbara Edwards, Director of the Disabled and Elderly Health Programs Group, at 410-786-0325.

Cindy Mann

Section 1115 of the Social Security Act gives the Secretary of Health and Human Services authority to approve experimental, pilot, or demonstration projects that promote the objectives of the Medicaid and CHIP programs. The purpose of these demonstrations, which give States additional flexibility to design and improve their programs, is to demonstrate and evaluate policy approaches such as:

  • Expanding eligibility to individuals who are not otherwise Medicaid or CHIP eligible
  • Providing services not typically covered by Medicaid
  • Using innovative service delivery systems that improve care, increase efficiency, and reduce costs.

In general, section 1115 demonstrations are approved for a five-year period and can be renewed, typically for an additional three years. Demonstrations must be “budget neutral” to the Federal government, which means that during the course of the project Federal Medicaid expenditures will not be more than Federal spending without the waiver.

Final Rule-Review and Approval Process for Medicaid and CHIP Section 1115 Demonstrations

Section 1115 Demonstration Transparency State Health Official Letter


Prevention: ROI

Health Prevention: Cost-effective Services in Recent Peer-Reviewed Health Care 

What GAO Found

GAO reported on preventive health services that were found to be cost-effective and/or cost saving in meta-analyses or comparative studies published in peer-reviewed journals from January 2007 to April 2014. GAO categorized each service identified in the review into a preventive health type (e.g., clinical intervention, screening, or vaccination), and provided information on the target population, whether a service was cost saving, and whether a service had been recommended by the U.S. Preventive Services Task Force or the Advisory Committee on Immunization Practices.

Why GAO Did This Study

Cost-effective preventive health services, such as immunizations and screening, may assist providers in helping patients avoid the onset or worsening of various health conditions. Services are determined to be cost-effective when they improve the benefit (e.g., health outcomes) in a less costly way than a given alternative. Some preventive services may also result in cost savings where the cost of implementing the service is less than the expected future costs to treat a disease or condition. GAO previously reported on available information about the cost-effectiveness of and cost savings from preventive health services in December 2012. GAO found that multiple factors affect these estimates, including the population targeted for a health benefit (e.g., children and high-risk populations) and assumptions about effectiveness of the service (e.g., how many years of protection a vaccine provides). Given the lack of readily available detailed information on the value of preventive services, GAO was asked for additional information on the services that may be potentially cost-effective or cost saving. In this report GAO examined recent peer-reviewed literature to identify preventive services that were shown to be cost-effective and the extent of potential cost savings of these services. GAO conducted a literature review of articles about U.S. preventive services in meta-analyses or comparative studies in peer-reviewed journals published between January 2007 and April 2014 that addressed cost-effectiveness or cost savings. A total of 29 articles met GAO’s inclusion criteria.

What GAO Recommends

GAO is not making any recommendations.

For more information, contact James Cosgrove at 202-512-7114 or

Environmental Scan and Literature Review:  Factors that Influence Preventive Service Utilization among Adults Covered by Medicaid Improving Quality of Care in Medicaid and CHIP through Increased Access to Preventive Services (April 15, 2014 – 54 pgs)
Christal Ramos, Anna C. Spencer, Arnav Shah, Ashley Palmer, Vanessa C. Forsberg, and Kelly Devers
Submitted to: Deirdra Stockmann, Ph.D. Center for Medicaid and CHIP Services Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244
The Urban Institute
Contract Number: HHSM-500-2010-00024I/HHSM-500-T0005      April 15, 2014

 Executive summary
Preventable disease accounts for 75 percent of health care spending in the United States, and is linked to 7 out of 10 premature deaths. Despite the benefits of preventive care, the Centers for Disease Control and Prevention estimate that Americans access preventive services at only about half the recommended rate (Centers for Disease Control and Prevention 2013).

State Medicaid coverage of preventive services is widely variable (Kaiser Commission on Medicaid and the Uninsured 2012). The Affordable Care Act (ACA) presents several opportunities to increase access to preventive services, both through the expansion of Medicaid and through several provisions in the law that provide incentives to states to increase access to Medicaid- and CHIP-covered preventive services.

Most notably, Section 4106 of the ACA gives states the option to receive a 1 percentage-point increased federal medical assistance percentage (FMAP) to cover USPSTF- and ACIP-recommended services with no cost-sharing requirements for existing and newly eligible Medicaid beneficiaries. These incentives to increase coverage provide opportunity to promote preventive services among Medicaid and CHIP beneficiaries, many of whom will be able to access these services without cost-sharing.

This environmental scan examines the literature from the last five years on preventive care services for adults enrolled in Medicaid and CHIP in order to identify potential opportunities and strategies to promote preventive service utilization. It explores the influence of a variety of factors that affect the use of preventive services, including policy decisions at the federal and state levels, and barriers and facilitators at the delivery system, provider and patient levels, and how these factors potentially influence utilization. Evidence around health and costs outcomes associated with preventive services use is also summarized.