Unpacking the MACRA: How it Affects Healthcare Providers and Patients

What Is Meant by MACRA?

MACRA is a federal legislation that stands for Medicare Access and CHIP Reauthorization Act. It was passed in 2015 by both political parties to replace the old SGR formula that calculated Medicare part B reimbursement payment rates for physicians. SGR was created to control the increasing spending growth of the fee for service model but failed because it only controlled the pricing structure and not the volume of services. This means that with SGR, Medicare payments to physicians might have been lower, but physicians had no reason to reduce the number of tests and procedures they ordered. This is where MACRA comes in to improve the relationship between physicians and Medicare beneficiaries. MACRA is a comprehensive legislative act that includes provisions for technical assistance funding to providers, development and testing of measures, data sharing requirements, and the establishment of federal advisor groups. All these provisions make MACRA a significant step towards restructuring healthcare in the United States.

What MACRA Includes?

In brief, MACRA offers physicians a more effective and incentivizing payment system to improve the quality of care they provide to patients. This is accomplished through two payment tracks:

• MIPS (Merit-based Incentive Payment System)
• AAPMS (Advanced Alternative Payment Models).

MIPS

MIPS is designed to streamline the reporting process for healthcare providers by consolidating three pre-existing quality reporting programs – PQRS, VBPM, and MUI – and adding a new category called Improvement Activities. Physicians’ performance in these four programs determines their reimbursement plan under MIPS. Based on their MIPS performance score, healthcare providers may receive positive, negative, or neutral adjustments to their base rate for Medicare part B payment. The core principle behind MIPS is budget neutrality, which means that higher reimbursements for well-performing providers are balanced by payment cuts to low-scoring providers. This ensures that the program incentivizes improved care quality while remaining financially sustainable.

 APM

APMs are new ways for Medicare to support healthcare providers who care for Medicare beneficiaries. Providers participating in APMs are also subject to MIPS, but receive a more favorable scoring system that leads to higher reimbursement rates. APMs incentivize providers to offer innovative and coordinated care models that improve patient outcomes and reduce healthcare costs. By participating in APMs, healthcare providers have the opportunity to receive higher reimbursements for providing high-quality care and reducing healthcare costs, benefiting both patients and the healthcare system.

AAPMs are not technically a reimbursement plan, as providers participating in AAPMs receive a lump sum payment equal to approximately 5% of their last year’s fee-for-service payments. Physicians participating in AAPMs may be excluded from MIPS, but to qualify for it, they must use certified electronic health record (EHR) technology, report quality measures that are comparable to MIPS, and bear financial risk in excess of a nominal amount, or participate in a patient-centered medical home model under the Center for Medicare and Medicaid Innovation’s (CMMI) authority. By participating in AAPMs, healthcare providers have the opportunity to receive a predictable stream of revenue while delivering high-quality care to patients. This encourages providers to adopt innovative payment and care delivery models that incentivize improved care quality, efficiency, and patient outcomes.

MACRA – TIMELINE

The timeline for MACRA includes four years, with each year having an adjustment percentage range.

What’s Your Role In MACRA?

It’s important for healthcare providers to understand and prepare for MACRA, as it establishes a value-based payment system that rewards providers for delivering high-quality care. MACRA’s payment measures are based on the outcomes of care provided by a particular provider, with better outcomes resulting in a higher percentage of payment. It’s important to note that MACRA and its corresponding payment measures only apply to Medicare part B payments. The framework also defines better measures to evaluate performance, resulting in improved care at lower costs. The quality reporting measures under MACRA are more manageable and clearer, reducing the risk of errors and improving overall effectiveness. By implementing MACRA, healthcare providers have the opportunity to enhance the quality of care they provide while also improving their financial performance.

For providers, MACRA means that they will be paid based on patient outcomes, which requires them to examine data from multiple systems and compare themselves to their peers. This need for data comparison will reshape the data infrastructure, and effective data sharing will be a key component of MACRA’s success. Providers will need to collect a wide range of data accurately, effectively, and quickly to ensure that MIPs data reporting is successful. As a result, providers will have to adapt their systems and processes to meet the data sharing requirements of MACRA. The transition to MACRA will not only improve the quality of care provided but also promote the adoption of modern technology and data infrastructure in healthcare.