Understanding MACRA

Medicare Access & CHIP Reauthorization Act of 2015 (“MACRA”) helps CMS meet its quality and value goals in transforming the healthcare system.

MACRA Is a proposed rule issued by the Centers for Medicare & Medicaid Services (“CMS”) on April 27, 2016. The rule replaces the flawed Sustainable Growth Rate formula by creating a new framework for rewarding physicians for the value and quality of care they provide.

The proposed rule would implement these changes through the “Quality Payment Program,” which includes two paths:

The Merit-based Incentive Payment System

MIPS is a Medicare value-based payment system that consolidates the existing Meaningful Use, Physician Quality Reporting System (PQRS) and Value-Based Payment Modifier (VBM) programs. The streamlined system will evaluate the performance of all MIPS eligible clinicians or eligible groups across four performance categories in order to determine payment adjustments that will be applied in the future: Quality, Advancing Care Information, and Resource Use (or Cost), respectively. MIPS has added a fourth component called, “Clinical Practice Improvement”.

The proposed rule would improve Medicare’s value and quality-based payments and will allow clinicians to select measures and activities appropriate to the type of care they provide.

The Center for Medicare & Medicaid Services (CMS) would begin measuring performance through MIPS in January 2017, with payments based on those measures beginning in 2019.

Advanced Alternative Payment Models (APMs)

The second path MACRA creates are Alternative Payment Models (APMs). APMs are new approaches to paying for medical care through Medicare that incentivize quality and value. There are now two types of alternative payment models: Alternative Payment Models and Advanced Alternative Payment Models.  Clinicians who take a further step toward care transformation, by participating to a sufficient extent, will be exempt from the Merit-based Incentive Payment System (MIPS), and can qualify for a 5% Medicare Part B incentive payment.

Eligible APMs meet the following criteria:

  • Base payment on quality measures comparable to those in MIPS
  • Require use of certified EHR technology
  • Either (1) bear more than nominal financial risk for monetary losses OR (2) be a medical home model expanded under CMMI authority

Although more will be learned about MACRA in the coming months, today is the best time to start preparing for MACRA. We will continue to provide updates as soon as new details are released.