What is MACRA: Impact on My Healthcare Practice

Medicare Access and CHIP Reauthorization Act (MACRA) significantly changes how Medicare will reimburse physicians in the future. With greater emphasis on quality, value and physicians taking more financial risks, MACRA makes three important changes to how Medicare pays those who give care to Medicare beneficiaries. These changes create a Quality Payment Program (QPP) and aims at making a new framework for rewarding health care providers for giving better care not more just more care. MACRA does away with the Sustainable Growth Rate (SGR) formula, and adopts two new QPP paths – The Merit-Based Incentive Payment System (MIPS) or Alternative Payment Models (APMs).

Understanding MIPS

MIPS is a new payment program for Medicare-participating practitioners that consolidates components of three existing programs, namely the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR).

Consistent with the goals of the law, the proposed rule would improve the relevance and depth of Medicare’s value and quality-based payments and increase clinician flexibility by allowing clinicians to choose measures and activities appropriate to the type of care they provide. A single MIPS composite performance score will factor in performance in 4 weighted performance categories:

  • Cost of service
  • Quality of service
  • Clinical Practice Improvement Activities
  • Advancing Care Information

Understanding APMs

APMs are new approaches to pay for medical care through Medicare that incentivize quality and value. This has created new opportunities for physicians to develop and participate in alternative payment models (APMs). MACRA provides a 5% annual lump sum payment to physicians who participate in qualified APMs at certain threshold levels, and it exempts them from the new Merit-Based Incentive Payment System or MIPS.

Participation in APMs, or participation in qualified APMS at levels below the MACRA thresholds, will allow physicians to improve their MIPS scores. In addition, MACRA has created a Physician-Focused Payment Models Technical Advisory Committee to review and make recommendations on stakeholder proposals for new Medicare APMs. MACRA encourages physicians to participate in the following APMs:

  • Accountable care organizations (ACOs)
  • Bundled payments
  • Patient-centered medical homes (PCMHs)

Intermediate Options

It is important to note that MIPS and APMs is not a binary decision; there are intermediate options and benefits for clinicians who don’t have enough participation in an Advanced APM or who are part of an Alternative Payment Model that doesn’t meet the requirements for an Advanced APM. To start with, in order to determine whether clinicians met the requirements for the Advanced APM track, all clinicians will report through MIPS in the first year. The proposed rule provides flexibility for participating in MIPS and makes it easy for clinicians to move between the components of the Quality Payment Program—the MIPS track or the Advanced APM track.

Regardless of the path your practice takes, MIPS or APMs, quality reporting and improvement will be a bedrock requirement under the new law. Financial incentives in both systems will be tied to quality performance. Reporting as early as 2017 will affect your scores and adjustments in 2019. Over the next few years, CMS will align reporting measures to MACRA, effective 2019. The first performance period begins in January 2017. This will give providers just a few months to prepare. Not only will clinicians need to understand the reimbursement changes and scoring, they will also need to begin making important decisions about participating in an APM.