Making Sense of the MACRA: A Primer for Trustees

By Akin Demehin

What is the MACRA?

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) significantly changes how Medicare pays for physician services. The MACRA repealed the sustainable growth rate (SGR) formula that created physician payment “cliffs” requiring numerous temporary patches from the Congress. More importantly, the MACRA established a new two-track physician payment program that increases the amount of Medicare physician payment at risk for quality and cost performance, and provides incentives to adopt new value-based payment models. The new program began on Jan. 1, 2017; clinician performance during 2017 will impact payment in 2019.

Most clinicians will be paid under the default track of the new program, known as the Meritbased Incentive Payment System (MIPS). The MIPS provides incentives and penalties of up to 9 percent of Medicare professional services payments, based on quality and cost performance. Clinicians are expected to submit a significant amount of data to meet MIPS requirements. An alternative track allows clinicians to earn incentives for participation in certain advanced alternative payment models (APMs). APMs move payment away from fee-for-service reimbursement, and instead pay providers based on the quality and cost of care for particular episodes (e.g., bundled payment), or defined patient populations (e.g., accountable care organizations (ACOs)).