Final MACRA Rule

By November 14, 2016Health

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was signed into law in April 2015 and repeals the Medicare sustainable growth rate (SGR), which was the previous method of controlling spending on physician services. According to the Office of the Federal Register, MACRA is effective on January 1, 2017 and implementation is slated for January 1, 2019. MACRA replaces SGR with an approach to payment called Quality Payment Program, which rewards high-quality patient care through Advanced Alternative Payment Models (Advanced APMs) and the Merit-based Incentive Payment System (MIPS) for eligible clinicians.

Alternative Payment Models provide added incentives to deliver high-quality and cost-effective care (1). MIPS, a program for certain Medicare-enrolled practitioners, consolidates the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals. Like APMs, MIPS also hopes to focus on quality and cost. One key difference between MIPS and APMs is that MIPS will start to see a range of payment adjustments, with potential penalties of -4% and bonuses as high as 12% in 2019 (3). These penalties and bonuses are expected to increase after the first few years, with reductions as much as -9% and bonuses as high as 27%. Clinicians that participate in APMs are exempt from MIPS requirements and can earn favorable financial rewards, although only those who are a part of risk-based payment models are qualified.

MACRA hopes to ease into the new reporting systems by including more flexibility for rural and smaller practices (2). Nearly a third of Medicare physicians could be exempt from Medicare’s MIPS, and representatives from the Centers of Medicare and Medicaid (CMS) expect only 25% of physicians to participate in APMs in 2018. This final rule also includes a Pick Your Pace option for physicians to allow for an easier transition and is also geared toward smaller practices. Additionally, CMS raised the low-volume threshold from $10,000 to $30,000. This allows physicians with less than $30,000 in Medicare payments or fewer than 100 Medicare patients to be exempt from the MIPS reporting requirements.

For anesthesiologists and other healthcare providers, there is some flexibility and choice with which track of payment to pursue (3). Some may choose to enter into Advanced APMs by strategically increasing traditional Medicare payments or patient counts tied to Advanced APM models. Those that already meet the criteria for APM cannot, however, opt out. There is also a third option called Partial Qualifying APM Participants in between MIPS and APM tracks that may be a better option for physicians that are on the border of both tracks.

While the final MACRA rule of nearly 2,400 pages will go into effect in 2017, it is expected that this rule will see many changes in the future (2). Andy Slavitt, CMS’s Acting Administrator, reported that “[w]e know that this law and regulation need to evolve.”