MACRA: New Opportunities For Medicare Providers Through Innovative Payment Systems

Patrick H. Conway, Tim Gronniger, Hoangmai Pham, Kate Goodrich, Amy Bassano, JP Sharp,Alison Falb, and Molly MacHarris

oday, almost 60 million Americans are covered by Medicare — and 10,000 become eligible for Medicare every day.

For many years, Medicare was primarily a pure fee-for-service (FFS) payment system that paid health care providers based on the volume of services they delivered, not the value of those services. Over time, this contributed to increased costs with little improvement in the quality of care.

However, that system is changing as we work to improve our nation’s health care delivery system to ensure patients and their families receive the best care possible. And, we want to hear from you. Today, the Centers for Medicare & Medicaid Services (CMS) released a Request for Information (RFI) to seek public comment related to new provisions in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA): Merit-based Incentive Payment System (MIPS), Alternative Payment Models (APMs), and a physician-focused payment model (PFPMs).

Driven by the Affordable Care Act, CMS has taken substantial steps toward this better, smarter, and healthier system through quality improvement programs, promotion of electronic health record use, Accountable Care Organizations (ACOs), Patient Centered Medical Homes, bundled payment models, and other Alternative Payment Models (APMs) developed at CMS.

Driving CMS further along the path to value, in January 2015, Secretary Burwell set goals for 30 percent of traditional Medicare payments to be tied to APMs, such as bundled payments, ACOs, or medical homes, by the end of 2016, and 50 percent of such payments to be tied to these models by the end of 2018.

The Department of Health and Human Services (HHS) has already made significant progress in reaching these goals. In 2011, no Medicare payments were made through APMs; by 2014, approximately 20 percent of payments were made through these APM arrangements. And, HHS continues to catalyze stakeholders across the health care spectrum to join in the path to value. In March 2015, HHS launched the Health Care Payment Learning and Action Network to bring together stakeholders in the public and private sector to accelerate adoption of value-based payments and APMs.

The MACRA: A New Opportunity

On April 14, 2015, a large bipartisan majority in Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). President Obama signed the MACRA into law on April 16, 2015. The MACRA permanently repeals the flawed Sustainable Growth Rate formula for determining Medicare payments for clinicians’ services, establishes a new framework for rewarding clinicians for value over volume, and streamlines other existing quality reporting programs into one new system.

The MACRA was passed with bi-partisan support and will help accelerate paying for and rewarding value. Implementation of the MACRA is a major opportunity to put a broad range of health care providers on the path to value through the new Merit-Based Incentive Payment System (MIPS) and incentive payments for participation in certain Alternative Payment Models (APMs).

Path #1: MIPS

The MACRA sunsets the payment adjustments associated with the Physician Quality Reporting System, the Value-based Payment Modifier, and the Medicare Electronic Health Record (EHR) incentive program for Eligible Professionals. The MIPS combines those efforts into a single consolidated program with four weighted performance categories upon which eligible professionals (EPs) will be assessed: Quality; Resource Use; Clinical Practice Improvement Activities; and Meaningful Use of Certified EHR Technology.

MIPS requires the Secretary to develop and provide clinicians with a Composite Performance Score that incorporates MIPS EP performance on each of these categories. Based on this Composite Performance Score, EPs may receive an upward, downward, or no payment adjustment. MIPS offers an opportunity for EPs to achieve significant financial incentives for providing health care that advances the goals of a better, smarter, and healthier system.

Path #2: APMs

The MACRA also provides incentives for participation in certain APMs. “Qualifying APM participants” will not be subject to MIPS adjustments and will receive a lump sum incentive payment equal to 5 percent of the prior year’s estimated aggregate expenditures under the fee schedule. The 5 percent incentive payment is available from 2019 to 2024, but beginning in 2026, the fee schedule growth rate will be higher for qualifying APM participants than for other practitioners.

The MACRA also encourages expansion of the APM options available to physicians, especially specialists, through physician focused payment models (PFPMs). The law requires the establishment of a Technical Advisory Committee that will assess PFPM proposals submitted by stakeholders and make recommendations to the Secretary about which models to consider testing. This is a valuable opportunity for stakeholders to participate in delivery system reform by developing and submitting their ideas for APMs.

Request For Information

We encourage you to read the RFI and submit comments to CMS within the next 30 days. Your input is very important to us.

As we implement this historic legislation and continue to advance along the path to value in health care, we hope stakeholders will take this opportunity to provide input through the RFI. These new programs afford providers the opportunity to be rewarded for providing high quality care at lower costs, and our goal is to help providers be successful while reducing administrative burden. Together, we can create a health care system that delivers better care and healthier people and spends health care dollars more wisely.

MACRA: New Opportunities For Medicare Providers Through Innovative Payment Systems