On April 15 of 2015, President Obama and the members of Congress passed the Medicare Access and Chip Authorization Act (MACRA), which included a permanent solution, instead of the repeated temporary fixes, for the Medicare Sustainable Growth Rate methodology used to pay doctors.

Under the new law, from 2015 till the end of 2018, physicians will see an automatic increase of 0.5% per annum in their Medicare payments. Starting in 2019, no automatic increase will be provided, and doctors will transition to a Merit-Based Incentive Payment System (MIPS), or an alternative payment model.

Those who choose the MIPS track for reimbursement will have their Medicare physician fee schedule payments adjusted up or down, based on performance measures in four weighted categories: quality, resource use, meaningful use of electronic health records, and clinical improvement.

Though these payment models will not take effect till 2019, the next 12 months will be crucial. A provider’s performance in quality reporting programs in 2016, will affect the final MIPS score.  Or, if a provider chooses not to participate in the MIPS program, they will need to prepare their practice for participation in an alternative payment model such as Accountable Care Organizations and Patient-Centered Medical Home (PCMH).

Read: Difference between ACOs and PCMH?

Here is everything you need to know about the MIPS system, and what you need to do to prepare your facility.

 About MIPS

MIPS, the merit-based incentive payment system, uses a score on a 100-point scale to grade your practice’s performance in four different categories. These performance categories include:

• meaningful use (MU)
• the quality of your value-based modifier (VBM) payment system by the Physician Quality Reporting System (PQRS) standards
• your use of VBM payment resources
• and the improvement of your clinical practice over time

By determining the points earned in each category, the financial impact on your practice could be significant.

The Centers for Medicare and Medicaid Services (CMS) has set a standard of 50 points as the “performance threshold,” meaning that you must reach at least 50 points to avoid paying a penalty.

Therefore, if your practice scores a 50, your payment adjustment will be 0 percent, meaning you won’t pay a penalty or receive a reward. However, if your practice scores a 51 or above, you could receive financial compensation for your efforts.

Bonuses for Participating in MIPS

As mentioned above, your practice could be eligible to receive financial compensation if you manage to get a score of 51 points or higher on the performance threshold scale. In addition to an adjustment on your base pay, the facilities which meet the “exceptional performance” criteria, will get an additional financial bonus of up to 10 percent. However, in order for your company to receive an additional financial bonus, it must be in the top 25% of the MIPS scores that have scored 51 points or higher on the performance threshold scale.

CMS Physician Comparison

Getting a score higher than 50 is not your only goal when you participate in the MIPS system. CMS has proposed that they will post individual category scores on a Physician Comparison website, so that potential patients can see how you stack up against other healthcare facilities in your area. So if financial compensation wasn’t enough incentive, now you are also competing with other practices in your area for the attention of potential patients.  This should provide even more motivation for you and your employees to perform to the absolute best of your abilities.

Determining Factors of MIPS

The performance categories outline what will be evaluated when calculating your practice’s performance threshold score, but what do they really mean?

Concerning VMB quality, the Department of Health and Human Services (HHS) will set the annual measures in cooperation with PQRS requirements; so these standards could change yearly.

Similarly, the use of VBM resources will be determined by the calculation of cost measures your practice spent.

MU, of course, relates to your practice’s compliance with Electronic Health Records (EHR) policies and how well you utilize the system.

Read: 6 Tips to Prepare for Meaningful Use attestation in 2016

The improvement of your clinical practice is a broader definition, as it is a new category and comes with several components. While this category carries the least weight with 15 points on the performance threshold scale, some of the “improvements” you can watch out for are:

• use of eligible alternative payment methods
• expansion of the access to your practice
• beneficiary engagement, among others

Eligibility Requirements for MIPS

If you aren’t certain whether or not your healthcare facility qualifies to be a part of the MIPS system for 2017, here is a quick list of those who will be:

• physicians and assistants
• nurse practitioners and anesthetists
• clinical nurse specialists

Unfortunately, providers who do not meet the “low volume threshold” for 2017 will not be able to participate. Additionally, first-year providers of Medicare and those involved in the Medicare Shared Savings Program (MSSP) as ACO providers are not eligible.

In 2019, however, additional healthcare facilities, such as physical therapists, clinical psychologists, dietitians and many more, will be added to the list of those who can participate.

Future Goals: How to Gear Up for 2017

Though the final rules for MIPS 2017 will not be determined until an estimated date of November 2016, there are ways you can still prepare your practice for participation. By focusing on the existing programs of MU, VBM, and PQRS, you can continue to improve on performances within your practice.

Also, look at which areas of your medical facility seem to be struggling, and determine ways you can rectify those issues.

The course of 12 months should be enough time to address these issues. By using 2016 as a trial run, you can work out all the kinks in your processes, so that employees are not having to adjust to new procedures during 2017 when your practice’s performance will be measured for MIPS.