The Medicare Access and CHIP Reauthorization Act (MACRA) represents a major piece of legislation, and understanding it is important for all healthcare providers. But with a nearly 2,400-page final rule from the Centers for Medicare and Medicaid Services (CMS), staying informed can be a challenge.

What is MACRA?

Signed into law back in 2015, MACRA has also been called a "permanent doc fix." This legislation effectively repealed the use of the Sustainable Growth Rate formula for reimbursement of clinicians who treat patients with Medicare coverage. The major goal of its adoption was to restrict ballooning Medicare expenditures, in part by emphasizing quality over quantity. To this end, MACRA is implementing a new Quality Payment Program for Medicare reporting. Included in the Quality Payment Program is legislation that incentivizes more extensive use of healthcare IT, incorporating elements of the Meaningful Use and Physician Quality Reporting System programs.

MACRA also included several other provisions in addition to its Quality Payment Program. Chief among them is the extension of the Children's Health Insurance Program (CHIP), which is intended to ensure health insurance coverage for children from low-income families who do not qualify for Medicaid. Additionally, MACRA aims to grant patients a greater level of privacy and security through such measures as the removal of Social Security Numbers from Medicare cards.

When is MACRA going into effect?

The first year for MACRA reporting was originally planned for 2017. Unfortunately, many healthcare organizations remain unprepared for these changes. In an effort to address this issue, CMS has introduced flexible reporting options for easing into MACRA in 2017 without penalty. With 2017 as a transition year, eligible participating providers may receive a 0.5% increase but will not be penalized with reductions if reporting does not meet the new MACRA standards. This flat-rate increase will be the same in 2018. Full implementation of MACRA is expected by 2021, with 2019 as the first full payment year for its Quality Payment Programs.

What is the Quality Payment Program?

The Quality Payment Program is MACRA's new value-based reporting system. It includes two major payment methods: the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Models (APMs).

How does MIPS work?

MIPS is the default track of the Quality Payment Program and will be the system that most providers will use. This reporting system can be submitted individually or in groups and applies to physicians but not hospitals. Through MIPS, reimbursement will be based on four differently weighted criteria:

  • Quality Activities — 60% for 2017
  • Clinical Improvement Activities — 15% for 2017
  • Advancing Care Information Performance — 25% for 2017
  • Cost/Resource Use — This will not factor into the calculation for 2017 but will make up to 30% of it by 2021.

Any payment increases and/or reductions will be determined by these performance metrics. Additionally, potential bonuses for exceptional performance may also be included in the near future.

What about APMs?

Although more complex than MIPS, reporting through APMs can mean higher reimbursement rates for providers. This option is intended for clinicians who focus on providing patients with care that is high quality, rather than high volume. The program has very stringent participation criteria, including a focus on implementing and improving effective Electronic Health Record systems. Most individual providers will not qualify for participation in APMs, but a number of specialized healthcare organizations have been determined to automatically meet these criteria. Additionally, those who receive a substantial amount of reimbursement through APMs are exempt from MIPS filing.

Where can more information about MACRA be found?

For a more in-depth and detailed explanation of what MACRA means for healthcare providers, take a look at the pages provided by the Centers for Medicare and Medicaid Services and the Network for Regional Healthcare Improvement.

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