Massachusetts Medical Society: MACRA: What Physicians Should Know

MACRA: What Physicians Should Know

New Tracks for Medicare Payment Begin 2019


After 17 years of frustration and disappointment, Medicare’s flawed sustainable growth rate formula, long known as SGR, is finally history.

The premier feature of the new Medicare Access and CHIP Reauthorization Act, or MACRA, is that it creates a new payment system for physicians that fosters innovative delivery models while improving the myriad of disjointed penalty and measurement programs that plague the current fee-for-service (FFS) system.

“We no longer have the threat of 20–30 percent cuts in payment hanging over our heads,” said MMS President Dennis M. Dimitri, M.D. “We have finally and completely replaced the flawed SGR formula.”

Merit-Based Incentive Payment System

The law places physicians on one of two new tracks for Medicare payment beginning in 2019.

The first option, referred to as the merit-based incentive payment system, or MIPS, is closer in nature to FFS reimbursement, but it’s going to be a new-and- hopefully-improved model for FFS, according to Alex Calcagno, MMS Director of Federal Relations.

Under MIPS, the Centers for Medicare & Medicaid Services will incrementally adjust its fees based on scores in clinical quality, meaningful use of electronic health records, efficiency, and practice improvement. Under the model, physicians will be compared either to their peers in the same specialty or to themselves to determine how they have maximized resources from year to year.

The good news is that this change will streamline several disparate quality reporting programs onto one. “The vast array of incentive and quality programs that currently exist in CMS have been very confusing to physicians,” noted Dr. Dimitri. “Most of them are reaching the point where they can have negative impacts on physician payments, so the consolidation of much of that pay-for-performance will hopefully be simpler with less risk for payments to be cut.”

However, the particulars of how that will look have yet to be determined. “We are just beginning the process, but in a perfect world we envision all these programs will be one coordinated system, and its metrics will be meaningful, valid, and scientifically verifiable,” explained Calcagno.

Keeping some form of FFS reimbursement intact is important to sustaining the country’s and Massachusetts’ current base of physicians who are currently caring for patients, she added, noting that alienating physicians who weren’t interested in bearing risk would create an insurmountable access crisis.

Alternative Payment Model

For physicians that are already comfortable with or attracted to the higher potential rewards of a risk-based system, however, an alternative payment model (APM) offers a guaranteed five percent annual payment increase from CMS over the first six years of the program.

But as with MIPS, many details about the APM are still unknown. “We don’t know what those risk-based models are yet,” noted Calcagno. “According to the law, participants will have to bear a ‘substantial amount of risk,’ but that’s still undefined.”

The law does provide funding for quality-measure development, at $15 million per year from 2015 to 2019, while physicians are to be given their leading role in developing quality standards. In fact, there is call in the legislation for various physician specialty societies to be actively engaged in the development of appropriate metrics, Dr. Dimitri noted.

A Transitional Time for Medicine

Because each practice is unique, there are no uniform steps they should be taking to prepare for the changes that will begin to take place in 2019. Rather, this is a time for practices to familiarize themselves with the options, become involved in developing quality measures, and examine them closely to make an informed decision about which payment model to adopt in the coming years (though physicians will be allowed to switch models from year to year).

Practices that are not already aligned may want to use this time to take a close look at being part of an accountable care organization, independent practice association, or becoming a patient- centered medical home, noted Dr. Dimitri, as these steps set the groundwork for involvement in alternative payment models and quality reporting.

More on MACRA

Don’t forget that MACRA includes other important provisions, such as a two-year extension of the Children’s Health Insurance Program (CHIP). The law also extends funding for the CHIP and the National Health Service Corps, keeping the funding amounts for fiscal year 2016 and 2017 at the current fiscal year 2015 level. The last two “are both very important for creating an appropriate future work force of physicians as we go down the line,” said MMS President Dennis M. Dimitri, M.D.

Daunted by the complexity of the transition process, some practices have indicated that they may opt to take small pay cuts and forgo the potential for bonuses they could earn by participating in quality reporting programs, Dr. Dimitri said.

“Those practices will want to see what comes out of the support package [funded at $20 million per year from 2016 to 2020] that’s being put together to provide technical assistance for small practices. And the medical society is going to keep a close eye on that so we can be sure practices that feel in jeopardy will be informed about how they can access that technical support and make the changes that will help them to survive fiscally soundly in the future.”

At the moment, it’s up to medical societies and health care systems to make sure the programs are implemented as Congress envisioned them and to help physicians get from A to Z, according to Calcagno. “Our job is going to be to help them make the transition and decide what’s best for them and their patients,” she said.

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