Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and
Physician Payment Reform
Richard E. Moses, D.O, J.D.
The “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA) was initially passed on March 26, 2015 by the U.S. House of Representatives, and then by the Senate of April 14th by an overwhelming majority vote. MACRA was officially signed into law by President Obama on April 16, 2015.
This bipartisan legislation permanently repealed the Sustainable Growth Rate formula (SGR). It stabilizes Medicare payments for physician services with positive updates from July 1, 2015 through the end of 2019. MACRA makes radical changes to how Medicare reimburses physician services. The law repealed the Medicare Sustainable Growth Rate (SGR) methodology for updates to the Physician Fee Schedule (PFS). Among other things, MACRA requires the Centers for Medicare and Medicaid Services (CMS) to implement a two track payment system for physicians and other eligible health care providers (EPs) that replaces the current Fee-for-Service (FFS) reimbursement system. EPs currently include physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and groups that include these health care professionals.
The new payment system will be known as the Quality Payment Program (QPP). The proposed regulations for implementing the QPP was issued by CMS on April 27, 2016, with the final rule published on October 14, 2016. The open comment period for the final rule runs no later than 5 PM 60 days after the filing for public inspection. Interesting, recent polling data shows that a minority of physicians and health care providers are aware of, much less understand, the sweeping changes to come over the next few years.
The QPP is intended to reward the delivery of high quality health care rather than basing reimbursement on services provided. There are two reimbursement tracks available. EPs will have to choose to be reimbursed through either an Advanced Payment Model (APM) or the Merit-based Incentive Payment System (MIPS).
APMs are payment approaches developed in partnership with the clinical community to create incentives for physicians to participate. The goal is to move the Medicare program from a FFS model to a payment system tied to outcomes and population health. MACRA requires APMs to meet certain criteria. An APM must require the use of certified Electronic Healthcare Records, provide payment based on quality measures comparable to those used in the MIPS quality category, and assume financial risk for more than a nominal amount of monetary loss, or be a medical home that meets certain criteria. Advanced APM providers are required to refund Medicare if their spending for health care services under the model exceeds a projected amount.
MIPS, on the other hand, is based on the FFS model, and is felt to be the reimbursement model that most EPs will choose. It directly ties FFS to quality performance. Beginning January 1, 2019, MIPs becomes the default payment system for EPs. MIPS consolidates three existing pay-for-performance and reporting programs. The current programs are: Physician Quality Reporting System (PQRS), Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program. The consolidation of these program into MIPS will continue to focus on cost, quality, and the use of certified EHR technology (CEHRT) in a program that avoids redundancies. The final rule has rebranded this terminology. EPs will be assessed in the MIPS under four categories: Quality, Resource Use, Clinical Practice Improvement Activities, and Advancing Care Information (ACI).
As is readily apparent, health care reimbursement on the government side will undergo drastic changes over the next decade. This will affect all EPs. It is imperative for physicians in particular to understand the system if they are going to survive in the fluid health care environment of the future. As we have seen historically, private insurers quickly follow the government’s example when it comes to reimbursement of healthcare services.