Glossary · Reimbursement

MACRA

MACRA (Medicare Access and CHIP Reauthorization Act of 2015) is the bipartisan federal law that repealed the Sustainable Growth Rate formula and replaced it with the Quality Payment Program, which ties Medicare physician reimbursement to value-based performance through MIPS or alternative payment models.

Verified May 8, 2026 · 5 sources ↓

Drawn from CMSAccountablehqAnnexmedModmedAAPC

Definition

Source · Editorial summary grounded in 5 cited references ↓

Signed into law on April 16, 2015, MACRA fundamentally restructured how Medicare pays clinicians. It eliminated the flawed Sustainable Growth Rate (SGR) formula—which had threatened annual across-the-board payment cuts for over a decade—and created the Quality Payment Program (QPP) in its place. Under the QPP, eligible clinicians choose between two pathways: the Merit-Based Incentive Payment System (MIPS) or participation in an Advanced Alternative Payment Model (APM).

MIPS consolidates four legacy programs (PQRS, Value-Based Modifier, Meaningful Use, and the Medicare EHR Incentive Program) into a single composite score built from four performance categories: Quality, Cost, Promoting Interoperability, and Improvement Activities. That composite score drives a positive, neutral, or negative payment adjustment applied two years after the performance year. Advanced APM participants who meet patient or payment thresholds instead earn a 5% lump-sum bonus and are excluded from MIPS scoring.

For orthopedic practices, MACRA is not a background administrative detail—it is a direct lever on Medicare fee schedule revenue. A low MIPS composite score translates into a capped negative payment adjustment on every Medicare Part B claim for that adjustment year, while a high score can yield a positive adjustment and potential exceptional-performance bonus. Because orthopedic volume and acuity are high, even a modest per-claim adjustment compounds quickly across a busy surgical schedule.

Why it matters

A poor MIPS composite score—driven by incomplete documentation, miscoded quality measure numerators/denominators, or failure to attest Improvement Activities—produces a negative payment adjustment on all Medicare Part B claims two years later. For a high-volume orthopedic practice billing hundreds of joint replacement, fracture care, and spine procedures annually, a 9% downward adjustment (the maximum penalty under current MIPS rules) represents substantial lost revenue. Conversely, thorough coding that accurately captures clinical complexity supports higher Quality and Cost category scores, protecting and potentially increasing reimbursement.

Common mistakes

Where people most often go wrong with this concept.

Source · Editorial brief grounded in cited references ↓

Failing to link documentation of clinical complexity to MIPS Quality measure numerators, causing valid encounters to be excluded from measure reporting and suppressing the Quality category score.
Treating the MIPS adjustment as a current-year event—performance in Year N affects payment in Year N+2, so practices that ignore MIPS today are setting up a revenue shortfall two years out.
Defaulting to MIPS when an Advanced APM pathway (e.g., a CMS-approved bundled payment model for joint replacement) may be available and more financially advantageous for high-volume orthopedic surgeons.
Selecting MIPS Quality measures that apply to few orthopedic patients rather than specialty-relevant measures (e.g., functional outcome measures for total hip/knee arthroplasty), which limits the denominator and makes a high score harder to achieve.
Overlooking the Cost performance category: because CMS calculates episode-based cost measures (including lower extremity joint replacement episodes) automatically from claims data, coding inaccuracies that add avoidable utilization inflate cost scores without the practice realizing it.
Ignoring the Promoting Interoperability category requirements, which can result in a category score of zero and drag down the overall MIPS composite even when Quality and Improvement Activities scores are strong.

Related codes

Codes commonly involved when this concept appears in practice.

CPT

ICD-10

M17.11 M16.11

Modifiers

25 Significant separately identifiable E/M 59 Distinct procedural service KX Medical-policy requirements met

Frequently asked questions

Source · Generated from the editorial pipeline, verified against 5 cited references ↓

01Does every orthopedic surgeon who bills Medicare have to participate in MACRA's Quality Payment Program?

Most do. Clinicians who bill Medicare Part B above the low-volume threshold (more than $90,000 in Part B charges or more than 200 Medicare patients in a year, as of recent thresholds) are required to participate in either MIPS or an Advanced APM. Surgeons below the threshold are exempt from the payment adjustment but may still voluntarily report.

02How does MACRA differ from MIPS?

MACRA is the law; MIPS is one of the two payment tracks the law created. Think of MACRA as the statute and MIPS as the scoring and payment-adjustment mechanism that applies to clinicians who do not qualify for an Advanced APM pathway.

03When does my MIPS performance actually affect my Medicare checks?

CMS applies a two-year lag. Performance documented and reported in 2024 drives payment adjustments on Medicare claims processed in 2026. Practices that treat MIPS as a back-burner task are effectively programming future revenue losses today.

04Can orthopedic practices avoid MIPS entirely by joining a bundled payment model?

Potentially, yes—if the model qualifies as an Advanced APM under CMS criteria and the clinician meets the required patient or payment thresholds. CMS has approved episode-based models covering lower extremity joint replacement; surgeons who qualify receive a bonus instead of a MIPS adjustment. Consult a QPP advisor to determine eligibility.

05What is the maximum payment adjustment a low-scoring MIPS participant can face?

The maximum negative adjustment under current MIPS rules is 9% of Medicare Part B allowed charges for the adjustment year. For a busy orthopedic practice, this can represent a significant dollar impact across high-value procedures such as joint replacements and spinal fusions.

06Does accurate orthopedic coding actually affect MIPS scores?

Yes, in two ways. First, Quality measure denominators are often defined by diagnosis or procedure codes, so miscoded encounters may fall outside a measure's eligible population and reduce the reportable denominator. Second, the Cost category uses claims-based episode attribution, meaning every code on a claim contributes to whether and how an episode is assigned and priced.

Sources & references

Editorial content was developed using the following public sources. Last verified May 8, 2026.

Mira AI Scribe

Mira flags MACRA-relevant documentation gaps in real time at the point of care. When an orthopedic encounter involves a Medicare patient, Mira checks whether the note supports the selected MIPS Quality measure (e.g., functional outcome assessment for total knee arthroplasty, patient-reported outcome collection) and alerts the clinician before the note is finalized. On the coding side, Mira validates that diagnosis codes reflect documented clinical complexity—because cost episode attribution is calculated directly from claims, undercoded comorbidities (e.g., obesity, diabetes affecting healing) can inflate the Cost category score unfairly. Mira also surfaces Improvement Activity attestation opportunities embedded in standard orthopedic workflows, such as perioperative safety checklists and shared decision-making documentation, reducing the manual burden of MIPS reporting without requiring a separate reporting platform.

See Mira's approach

MIPS (Merit-based Incentive Payment System) is one of two participation tracks under CMS's Quality Payment Program (QPP), in which eligible clinicians earn a composite performance score across four categories that directly adjusts their Medicare Part B reimbursement—up or down—two years later.

Quality Payment Program (QPP) Reimbursement

The Quality Payment Program (QPP) is a CMS value-based reimbursement framework, established under MACRA in 2015 and launched in 2017, that ties Medicare Part B payment adjustments to clinician performance through two tracks: MIPS and Advanced APMs.

Value-based care Reimbursement

Value-based care (VBC) is a reimbursement framework that ties provider payment to quality outcomes and cost efficiency rather than to the volume of services delivered. In orthopedics, it replaces or supplements traditional fee-for-service payments with alternative payment models (APMs) that reward coordinated, high-quality musculoskeletal care.