MACRA

Overview

The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) and the October 14, 2016 final rule  (the “Rule”) from the Centers for Medicare & Medicaid Services (“CMS”) that implemented it eliminated the Medicare Sustainable Growth Rate methodology and fundamentally shifted how Medicare will pay physicians and other clinicians, incorporating quality measurement and reporting into payments, and driving clinicians to participation in value-based payment arrangements.

The Rule established a Quality Payment Program that applies to physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists—all whether in solo practice or in groups.  It consists of two payment tracks:  

  • Advanced Alternate Payment Models (“APMs”), based on participation in certain CMS-administered value-based payment programs or federal demonstration projects. Beginning in 2019, clinicians who are qualified Advanced APM participants will receive an annual 5% lump sum increase in Medicare Part B reimbursement.
  • Merit-based Incentive Payment System (“MIPS”)based primarily on performance in measures of quality, cost, improvement activities, and health IT.  Beginning in 2019, clinicians who participate in MIPS will receive upward or downward Medicare Part B payment adjustments based on their performance, with adjustments ranging from ±4% in 2019 to ±9% in 2022 and forward.  Nearly all clinicians who are not in an Advanced APM will participate in MIPS, but new Medicare Part B participants and those with annual Medicare Part B allowed charges below $30,000, or providing care for 100 or fewer Part B-enrolled Medicare beneficiaries, are excluded from participation.   

Regardless of participation in the Quality Payment Program, all clinicians are subject to a modest annual increase in the Medicare Part B physician fee schedule of 0.5% through 2019, and then 0.75% for qualified participants in Advanced APMs beginning in 2026, and 0.25% for all other clinicians.

MACRA was passed with broad bipartisan support and is therefore likely to continue to govern clinician reimbursement under a Trump administration. However, the selection of Tom Price to head the U.S. Department of Health and Human Services could result in changes to the Quality Payment Program, as Price has publicly objected to portions of the Rule and voiced specific concerns about the authority of the Centers for Medicare and Medicaid Innovation, which oversees the Advanced APM programs. Nonetheless, for now, most clinicians should continue to plan to participate in the Quality Payment Program as originally anticipated, while remaining alert to any potential policy changes that may be implemented by Price and the new administration.