Medicare Access and CHIP Reauthorization Act (MACRA)

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Medicare’s shift to value-based payment has been occurring incrementally over the past several years. Initiatives incorporating a “carrot and stick” approach to quality reporting such as the electronic prescribing, physician quality reporting system (PQRS), meaningful use (MU), and the value-based payment modifier (VBPM) are all precursors to Medicare’s latest and most transparent effort shift from volume to value.

When Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA) in April 2015 most of the attention was on the repeal of the sustainable growth rate (SGR). However, MACRA provided the opportunity to further goals set by the U.S. Department of Health and Human Services (HHS) to link traditional, or fee-for-service, Medicare payments to value-based outcomes. By 2018, HHS would like to see 50 percent of Medicare payments tied to some type of alternative payment model such as Accountable Care Organizations (ACOs) or bundled payment and 90 percent of all traditional Medicare payments tied to quality or value.

This new Medicare payment structure is being called the Quality Payment Program (QPP). The QPP establishes two new payment pathways for physicians. The first pathway is a modified fee-for-service model that combines and streamlines existing Medicare quality reporting programs (PQRS, MU, and VBPM). This pathway is referred to as the Merit-Based Incentive Program (MIPS). MIPS replaces the multiple payment adjustment methodologies under these various programs with one payment adjustment structure that will measure physicians and other eligible clinicians based on performance in four categories:

  • Quality
  • Resource Use
  • Advancing Care Information
  • Clinical Practice Improvement Activities

The second pathway provides a fixed five percent annual bonus payment to physicians participating in value-based alternative payment models (APMs) that focus on reduced costs and high-value services. This is referred to as the Advanced APM pathway.

Payment adjustments pursuant to the QPP are scheduled to begin on January 1, 2019. However, as with other Medicare quality programs, there is a two-year look back for the data on which those payments will be computed. So, the actions taken by physicians in 2017 (performance year) will determine their Medicare payments in 2019 (payment adjustment year).

For the 2017 performance year, physicians and other eligible professionals have several options for participation to avoid a negative payment adjustment in 2019. CMS refers to the options below as “Pick Your Pace.” 

  • First Option
    • Test the QPP by submitting minimal data to ensure that your system is working and that you’re preparing for broader participation in 2018 and 2019.
  • Second Option
    • Participate in the QPP for a portion of the 2017 performance period versus the full period.  By choosing this option, you could qualify for a small positive payment adjustment.
  • Third Option 
    • Participate in the QPP for the entire 2017 performance period by submitting information for the entire year on quality measures, how your practices uses technology, and what improvement activities your practice is undertaking.
  • Fourth Option 
    • Participate in the QPP by joining an Advanced APM and if you meet the thresholds for Medicare payments or number of Medicare patients, you can earn the five percent payment initiative in 2019. 

Physicians and other eligible clinicians choosing not to participate in any of the above options in 2017 will receive a four percent penalty in 2019.