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 reformed Medicare payment to physicians and other clinicians by incorporating quality measurement and reporting into reimbursement, and encouraging clinician 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: 

  1. 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.
  2. 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 Medicare Part B payment adjustments based on their performance, ranging from ±4% in 2019 to ±9% in 2022 and forward.  Clinicians who are not in an Advanced APM will participate in MIPS, but new Medicare Part B participants and those who do not exceed the “low-volume thresholds” (annual Medicare Part B allowed charges below $90,000, or treatment for 200 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 in 2015 with broad bipartisan support.  The Trump administration has made certain adjustments to MACRA, such as increasing the MIPS “low-volume thresholds” so fewer clinicians need to participate and implementing additional bonuses for small practices and clinicians that treat a large share of complex patients.  U.S. Health and Human Services Secretary Alex Azar has also signaled an interest in making other changes, ostensibly aimed at easing physician burdens, such as reporting requirements, under MACRA.  In sum, although it is likely that MACRA will undergo certain adjustments in the years ahead, it is likely that the fundamental program will remain, and that most clinicians will need to participate in the Quality Payment Program.  

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