What is MACRA?

The “Medicare Access and CHIP Reauthorization Act of 2015” or “MACRA,” was signed into law on April 16, 2015. The legislation replaces the current Medicare reimbursement schedule, which is based on a fee-for-service model with a new pay-for-performance program that is focused on quality, value, and accountability. According to The Centers for Medicare and Medicaid Services (CMS), MACRA will implement a new payment structure that rewards healthcare providers for delivering better care instead of more service.

MACRA makes three key changes to Medicare payment:

1. It ends the current Sustainable Growth Rate (SGR) formula for determining Medicare payments for health care providers’ services.
• Merit-based Incentive Payment System (MIPS), and
• Alternative Payment Models (APMs)
3. It combines three existing quality reporting programs into one new system and adds an additional program into MIPS:
• Physician Quality Reporting System (PQRS)
• Value-based Payment Modifier (VBPM)
• Meaningful use (MU)
• Clinical practice improvement activities (CPIA)


What is MIPS?

The Merit-Based Incentive Payment System (MIPS) is a new program that determines Medicare payment adjustments. It 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 program into one single program that Eligible Professionals (EPs) will be measured on. Contingent on a performance score, EPs may receive a payment bonus, a payment penalty, or no payment adjustment. The Composite Performance Score is comprised of the following four categories:

  • Quality (PQRS/VM) (50%)
  • Resource use (10%)
  • Clinical practice improvement activities (15%)
  • Meaningful use of certified electronic health records (EHR) technology (25%)

Performance will be measured in these categories to obtain a “MIPS score” (0 to 100). The MIPS score can impact a provider’s Medicare reimbursement in each payment year from -9% to +27% by 2022.


What is an Alternative Payment Model?

MACRA defines any of the following as an Alternative Payment Model (APM):

  • An innovative payment model expanded under the Center for Medicare & Medicaid Innovation (CMMI), with the exception of Health Care Innovation Award recipients;
  • A Medicare Shared Savings Program (MSSP) accountable care organization (ACO);
  • Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program; or
  • Another demonstration program required by federal law.

For a provider to receive enhanced payment through a qualified APM, the APM must also meet the following requirements:

  • Use of quality measures comparable to measures under MIPS;
  • Use of a certified electronic health record (EHR) technology; and
  • Assumes more than a “nominal financial risk” (which is undefined), OR is a medical home expanded under the CMMI.
  • A physician receiving the designated percentage of Medicare payments—or patients through a qualified, eligible APM based on the above requirements—is considered a “qualifying participant” (QP).


How do I know if I’m in MIPS or an APM?

Most physicians will utilize MIPS until more qualified, eligible APMs become available. However, physicians are able to switch payment models annually. According to the AAFP physicians interested in an APM model need to be prepared to start in the MIPS program.


When will MACRA be implemented?

  • 2016 through 2019: MACRA establishes a 0.5% physician fee schedule update each year.
  • January 2019: Based on qualification and eligibility, physicians may enter the APM track or the MIPS track.
  • 2020 through 2025: Medicare physician fee schedule updates remain at 2019 levels with no updates.


What should I be doing now to prepare for MACRA implementation?

  • If you haven’t reported data on quality measures through the Physician Quality Reporting System (PQRS) or as part of meaningful use, start as soon as possible.
  • If you submitted quality data during the last calendar year, you should have access to your Quality and Resource Use Report (QRUR). This report will help you understand your performance in terms of cost and quality so you can prioritize potential areas for improvement.

If your practice doesn’t provide chronic care management (CCM) services, consider the cost-benefit opportunity for increasing revenue to support needed practice transformation or quality improvement projects. Medicare began paying for CCM codes on January 1, 2015.


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