The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
MACRA – which was passed with bipartisan support in 2015 – promises to fundamentally change the way the United States evaluates and pays for healthcare. Review the full text here
Proposed MACRA Rules
Weighing in at just under 1,000 pages, the proposed rule drafted by the Centers for Medicare & Medicaid Services (CMS) is intended to provide the working guidelines for MACRA implementation. The proposed rules are now open for public comment. Read the proposed rule here
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is bipartisan federal legislation signed into law on April 16, 2015. The law does many things, but most importantly it establishes new ways to pay physicians for caring for Medicare beneficiaries. The law also includes new funding for technical assistance to providers, funding for measure development and testing, it enables new programs and requirements for data sharing, and establishes new federal advisory groups. It is comprehensive legislation that has the potential to significantly restructure US healthcare.
The Federal Department of Health and Human Services (HHS) and CMS have been engaged in the process of drafting rules based on the legislation since the law passed. Initial rules will be released for public review and comment in the Spring of 2016. Following a comment period, the rules will be revised and finalized for release and implementation in November of 2016.
What Does MACRA Do?
In the simplest possible terms, MACRA repeals the Sustainable Growth Rate (SGR) Formula that has determined Medicare Part B reimbursement rates for physicians and replaces it with new ways of paying for care. Under MACRA, participating providers will be paid based on the quality and effectiveness of the care they provide. A growing percentage of physician payment will be based on value – not on volume – like the current fee-for-service system. High value care will be defined by measures of quality and efficiency and providers will earn more or less depending on their performance against those measures.
MACRA’s value-based payment programs will be based on two new reimbursement structures:
- The Merit Based Incentive Payments System (MIPS) combines parts of the Physician Quality Reporting System (PQRS), the Value Modifier (VM or Value-Based Payment Modifier) and the Medicare Electronic Health Record (EHR) incentive programs into one. Under MIPS, Eligible Professionals (EPs) will be measured and paid based on:
- Resource Use;
- Clinical Practice Improvement; and
- Meaningful Use of Certified EHR Technology
MIPS guidelines will determine whether providers’ compensation for Medicare Part B reimbursements is adjusted up for superior performance, or down for performance that falls short of the established mean. Based on the MIPS composite performance score, providers will receive positive, negative or neutral adjustments to the base rate of their Medicare Part B Payment that will increase each year from 2019 (+4% to -4%) through 2022 (+9% to -9%), when adjustment levels will stabilize. The MIPS composite performance score will be determined by performance measures established in the forthcoming MACRA rules.
MIPs payment adjustments are required to be budget neutral. This means that rather than additional spending, higher reimbursement for those who score well will come from reduced payments to those with poorer performance.
- Alternative Payment Models (APMs) provide a new way for Medicare to compensate healthcare providers for the care they give to Medicare beneficiaries. Most providers who participate in APMs will also be subject to MIPS, but will receive favorable scoring – with correspondingly higher reimbursement rates.Providers participating in the most advanced APMs (including Accountable Care Organizations (ACOs), Patient Centered Medical Homes and Bundled Payment Models) may be designated as Qualifying APM Participants (QPs), which are not subject to MIPS. They may be eligible for:
- Annual 5% lump-sum bonus payments from 2019 through 2024;
- Beginning in 2026, higher annual premiums (for some participating providers); and
- Increased flexibility through physician-focused payment models
- Eligible Alternative Payment Models (e-APMs) The most advanced alternative payment models will be deemed ‘eligible’ APMs which qualify for even higher levels of reimbursement tied to performance. These will be a subset of APMs and will not include all payment models. Eligible APMs will require use of certified electronic health record (EHR) technology. Eligible APMs will only include payment models in which physicians bear ‘more than nominal’ risk for financial losses or participate in patient centered medical home models under CMMI authority.
MACRA and Measurement
Physicians will increasingly be paid based on the outcomes of their care. To pay for value, it must be defined and indicators – or measures- of good care will be selected to evaluate performance. These measures, once selected, will be used to determine increasing percentages of Medicare payment.
Defining common measures may enable better care at lower cost. HHS has acknowledged the level of burden and waste inherent in the current system’s cumbersome – even impenetrable – roster of performance measures. With each physician averaging more than 785 hours per year to report quality measures under the current system (collectively representing more than $15 billion per year), MACRA provides an opportunity to select and use clearer, more manageable, more meaningful measures that will improve reporting accuracy and effectiveness – and reduce waste.
It’s important to note that MACRA rules – and their corresponding payment measures – will only apply to Medicare Part B payments. However, because the rules will require compliance for compensation from the country’s largest payer, and because results will be available for public review, there’s reason to expect that MACRA will drive change for all patients and encourage broad-based transparency and accountability.
But MACRA’s push for value-based compensation may have additional impacts beyond measurement and payment change. Because providers will be paid based on patient outcomes, they will need to know what happens across the system outside of their offices. To effectively manage patient care, providers will be reliant on good, accurate data – often from multiple delivery systems. This necessarily means that the technology and data infrastructure will need to change. Where many providers are now reliant on EHR systems that are incompatible with those of competing systems, MIPS data reporting will only succeed when community wide data can be aggregated, assessed and mined quickly, efficiently and accurately. MACRA may provide the incentives for data sharing and greater standardization and usability of EHR technology. Data sharing standards are a key component of MACRA that will enable significant changes in patient care.
What’s the MACRA Timeline?
Here’s what’s on the horizon.
- April 2016: Initial Rules Published for Comment
- April 2016 through (September 2016?) Comment Period
- November 2016: Final Rules Published for Implementation
- Merit-Based Incentive Payment System (MIPS) Implementation:
- 2019 – Providers subject to -4% to +4% base rate adjustment for Medicare Part B reimbursements
- 2020 – Providers subject to -5% to +5% adjustment
- 2021 – Providers subject to -7% to +7% adjustment
- 2022 on – Providers subject to -9% to +9% adjustment
Over the course of the next several months, there will be plenty of opportunities to get smart about MACRA. Once you’re past the basics, there’ll be lots more to learn as the rules are released for comment, revised and re-released in final form for implementation.
It’s important to recognize the fact that the changes in MACRA are coming – like it or not. These are statutory changes that will determine payment starting in 2019. While it may be tempting to duck for cover, the best course of action is to learn all you can – and to determine how to be successful in the new environment. . We’ll be providing regular updates to call out important news, rules, comments and potential MACRA impacts. But in the meantime, here are a few ways to get ahead of the curve:
- Understand the coming changes. Read the rules and know the timelines.
- Get smart about performance and payment measures.
- Get smart. Performance measures will define how providers are evaluated – and ultimately compensated. Understand what measures will be used and how to know your own performance. Knowing how you compare and where to improve will help to avoid payment reductions when MACRA changes are implemented.
- Participate in regional and/or national measure selection forums. Choosing reliable measures will permit fair, reliable comparisons – while ensuring that provider performance will be fairly measured and appropriately compensated.
- Follow the National Quality Forum for MAP guidance. These recommendations are often embraced by CMS.
- The NQF MAP Committee is a multi-stakeholder forum that will review the measures – and make recommendations for use.
- These measures will matter, because providers will be paid according to them. MAP will strongly influence what shows up in the rules.
- You can get involved in MAP – or just stay tuned to the Forum.
- Embrace change now – because MACRA is here to stay.
- Expect transparency. New information about patient outcomes, resource use and provider performance will be shared publicly. As a stakeholder, you’ll benefit by understanding and embracing the importance of healthcare transparency. Learn how it will affect the way healthcare is measured, paid for and consumed.
- Pursue new relationships – across stakeholder lines. As stakeholders in the healthcare system, our success is more closely linked to other providers, purchasers, plans and consumers than ever before. MACRA makes traditional “us/them” healthcare paradigms obsolete. We either work together toward success now – or be dragged in or washed out later. The days of digging trenches are over. We need to be open, cooperative and collaborative to survive – and thrive.