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Tip Sheets

What is MACRA and what do reporters need to know about it?

By Rebecca Vesely

MACRA is the 2015 law that created Medicare's new payment system. It is the successor to the certified electronic medical record (EHR) Meaningful Use (MU) program. MACRA is set to have a profound effect on physician practices in the years to come.

What is MACRA?

The Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law on April 16, 2015. The law does four key things:

  • Repeals the flawed sustainable growth rate (SGR) methodology for determining updates to the Medicare physician fee schedule (known as the 'doc fix');

  • Creates a framework that ties physician payments to quality achievements;

  • Consolidates existing Medicare physician quality programs, including Meaningful Use (MU) of electronic health records;

  • Establishes a pathway for physicians to participate in Alternative Payment Models (APMs).

How does MACRA affect physicians?

MACRA affects physicians who participate in the Medicare program in three ways:

  1. Payments: MACRA changes Medicare reimbursement to an annual 0.5 percent payment increases for each of the next five years and creates two tracks for payments after that (more on these two tracks in a minute).

  2. Performance: MACRA more closely ties physician payments to quality goals.

  3. Infrastructure: MACRA requires infrastructure, especially in electronic health records, interoperability and population health management in the coming years.

What are the two new payment tracks for physicians?

As stated in item #1 above, MACRA creates two tracks for physician Medicare payments. As nearly everything in healthcare policy, these also come with acronyms: MIPS and APMs.

First up, MIPS, which stands for the Merit-based Incentive Payment System. Starting on January 1, 2019, MIPS consolidates three current quality improvement initiatives: The Physician Quality Reporting System; the Value-Based Modifier Program; and Meaningful Use of EHRs.

Replacing these initiatives will be four performance categories: quality; advancing care information (formerly MU); clinical practice improvement activities; and cost/resource use.

The Centers for Medicare and Medicaid Services is expected to publish MIPS metrics every November for the following year of reporting.

Based on how physicians perform on the required metrics, they will receive a score and be subject to a payment adjustment (either higher or lower than baseline) on that score. Additional incentives for high performers will be available through at least 2024.

The second track is APMs, Alternative Payment Models. The goal of APMs is to create new ways for Medicare to pay physicians for care. Examples of APMs are ACOs, patient-centered medical homes and bundled payments, and more will be developed over time. Providers who choose this track are exempt from MIPS requirements. To encourage providers to choose this track, the CMS is offering some incentives, like lump-sum incentive payments from 2019-2024, and in 2026 offering some providers higher annual payments. For more on APMs in MACRA, Health Affairs has a comprehensive rundown.

How does MACRA affect physician adoption of EHRs?

Meaningful Use will morph into the “Advancing Care Information“ bucket of physician incentive payments under MIPS. Providers who chose the APM track will also have to show savvy use of EHRs in their practices. According to the CMS, providers will have 11 EHR-related measures instead of 18 today (under MU). Reporting on physician decision support and CPOE would be eliminated.

In a blog post from April 2016, Andy Slavitt, CMS acting administrator outlined the vision for Advancing Care Information. He said MU would be replaced with “a more flexible, outcome-oriented and less burdensome proposal." This includes allowing physicians to select the measures that “reflect how technology best suits their day-to-day practice“ and “simplify the process of achievement and provide multiple paths for success."

Reporting would begin on January 1, 2017, along with other components of the quality payment programs. 2017 would be the reporting period for the 2019 payment adjustment.

What do doctors think about MACRA?

The CMS issued its proposed final rule on MACRA on April 27, 2016, and accepted public comment through June 28, 2016.

The three largest physician associations balked at the January 2017 start date, according to their public comments. The American Medical Association, American Academy of Family Physicians and Medical Group Management Association said the timeframe doesn't allow enough time to prepare. The AMA suggested a start delay of one year to January 2018.

Important MACRA dates

  • April 27, 2016: The CMS issued a proposed final rule on MACRA. The proposed rule was 962 pages.

  • June 28, 2016: The public comment period on the proposed final rule ended. Politico has a nice round-up of comments from key players. There were more than 3,700 public comments.

  • November 2016: CMS to issue final rule on MACRA

  • January 1, 2017: Reporting requirements begin, with reporting from this year setting the basis of the 2019 payment adjustment

  • January 1, 2019: Payment adjustments begin for Medicare physicians based on quality measures and other benchmarks

The CMS has a timeline for MACRA implementation.

Rebecca Vesely is AHCJ's topic leader on health information technology and a freelance writer. She has written about health IT since the late 1990s for a variety of publications.