To get a CQM performance rate (or result), you’d start by identifying the initial patient population (IPP) based on the measure specifications, then identifying the denominator eligible patients from the IPP, subtracting the denominator exclusions, identifying the numerator eligible patients from the resulting pool of patients, then subtracting any denominator exceptions from the denominator. So each of these "distinct calculations" are part of the overall measure calculation. Denominator exclusions are applied before the numerator calculation, but denominator exceptions are applied after the numerator calculation and only if the numerator conditions are not met. Here’s the flow: Initial Patient Population -> Denominator -> Denominator Exclusions -> Numerator -> Denominator Exceptions (only if the patient or encounter does not meet the numerator conditions) Here’s the information from the Blueprint on exclusions/exceptions: • Denominator exclusion: Patients who should be removed from the eMeasure population and denominator before determining if numerator criteria are met. • Denominator exception: Denominator exceptions are those conditions that should remove a patient, procedure or unit of measurement from the denominator only if the numerator criteria are not met. Denominator exceptions allow for adjustment of the calculated score for those providers with higher risk populations. Denominator exceptions allow for the exercise of clinical judgment. Generic denominator exception reasons used in proportion eMeasures fall into three general categories: medical reasons, patient reasons, system reasons.    There is also guidance regarding the method with which the denominator is calculated in this document on pages 3 - 4 (thanks to Kevin and Saul for pointing us to this) ... Excerpt pasted below for convenience: The key is at the end: "Rate = N/(D –DExclusion –DException)" .. as I understand that there may be other methods used to calculate the denominator. This is the method that CMS expects, and it is the method used by Cypress for certification testing. 2.3 Proportion Measures Most of the 2014 CQMs are proportion measures. In a proportion measure the scored entities (either patients or episodes) for a collection of patients are assigned to the populations and strata defined by a CQM, and the appropriate ‘rates’ computed. For example, if one of the MU2 EH CQMs, all of which are episode-of-care, is computed for a collection of 100 patients with a total of 132 episodes-of-care (as defined by the measure), each of the populations defined by the measure can contain between 0 and 132 episodes. The populations defined by a proportion measure are: Initial Patient Population(IPP): The set of patients (or episodes of care) to be evaluated by the measure. Denominator(D): A subset of the IPP. Denominator Exclusions(DExclusion): A subset of the Denominator that should not be considered for inclusion in the Numerator. Denominator Exceptions (DException): A subset of the Denominator. Only those members of the Denominator that are considered for Numerator membership and are not included are considered for membership in the Denominator Exceptions. Numerator(N): A subset of the Denominator. The numerator criteria are the processes or outcomes expected for each patient, procedure, or other unit of measurement defined in the denominator. The computation of a proportion measure proceeds as follows: Patients or episodes of care are classified using the IPP criteria, and those satisfying the criteria are included in the IPP. The members of the IPP are classified using the Denominator criteria, and those satisfying the criteria are included in the Denominator. The members of the Denominator are classified using the Denominator Exclusion criteria, and those satisfying the criteria are included in the Denominator Exclusions. The members of the Denominator that are not in the Denominator Exclusion population are classified using the Numerator criteria, and those satisfying the criteria are included in the Numerator. Those members of the Denominator that were considered for membership in the Numerator, but were rejected, are classified using the Denominator Exceptions criteria, and those satisfying the criteria are included in the Denominator Exceptions. For CQMs with multiple numerators and/or strata, each patient/episode must be scored for inclusion/exclusion to every population. For example if a CQM has 3 numerators, and the patient is included in the first numerator, the patient should be scored for inclusion/exclusion from the populations related to the other numerators as well. When the measure definition includes stratification, each population in the measure definition should be reported both without stratification, and stratified by each stratification criteria. Specific programs may require reporting of performance rates, but these are not required for certification. The performance rate is defined as: Rate = N/(D –DExclusion –DException)