MACRA Overview

MACRA permanently replaces the unsustainable Sustainable Growth Rate (SGR) formula (created in 1997 to restrict growth in Medicare Part B spending) with a system that attempts to prioritize quality over quantity. It also replaces Medicare's physician quality reporting programs with Merit-Based Incentive Payment System (MIPS). Several programs such as Accountable Care Organizations (ACOs), bundled payments, and various value-based models exist for hospitals and eligible professionals. These programs will continue but their incentives/penalties are not impacted by MACRA. 

Under MACRA, providers will receive a .5 percent annual increase until 2019, at which point they can choose between two value-based payment tracks: MIPS or Alternative Payment Methods (AMPs). Meaningful use will be moved under MACRA in both tracks. 


Starting in 2019, providers can choose between MIPS and APMs:

MIPS will be the default system, and consolidates the existing Meaningful Use, Physician Quality Reporting System (PQRS), and Value-Based Payment Modifier (VBM) programs. Physicians that choose this track face payment increases and or reductions based on performance. In the first year of payment, 2019, there is potential for a maximum plus or minus 4 percent or payments could also have no change or remain neutral.

A bonus (not to exceed 10 percent) for exceptional performance is part of this program for the first five years. An overall MIPS score will be calculated according to performance in four measures (weighted by performance, with potential changes in weight by year):

  • Quality (50 percent) Chose six measures to submit.
  • Example of outcome measure: 20/40 or Better Visual Acuity within 90 Days Following Cataract Surgery
  • Cost (Resource use) (10 percent) Calculated by CMS to compare resources used to treat similar care episodes and clinical condition groups across practices.
  • Advancing care information (Meaningful use) (25 percent) Continued focus on interoperability and security
  • Example: Electronic prescribing
  • Clinical practice improvement activities (15 percent) General categories include patient access, care coordination. Specifics due later.

The APMs track reimburses Medicare providers based on value of services rather than service volume. Providers meeting the criteria for this track cannot move to the MIPS track. Physicians receiving a significant portion of their payments through eligible APMs can be exempt from MIPS—and they receive a lump sum payment of 5 percent of covered services. By 2018, CMS wants 90 percent of payments tied to quality, with 50 percent under APMs.

  • The regulations provided more guidance on this track. Criteria include:
    • The advanced APM must require use of certified EHR technology.
    • Payment must be based on quality measures.
    • There also needs to be financial risk or a medical home that meets certain criteria.

Generally, most providers will not meet the criteria for this track. There are some organizations that are automatically qualified:

  • Comprehensive ESRD Care Model (large dialysis organization): 12 participants
  • Medicare Shared Savings Program—Track 2 and Track 3: 24 participants
  • Next Generation ACO Model: 21 participants
  • Comprehensive Primary Care Plus (CPC+): Currently regional with payers, available in 2017
  • Oncology Care Model Two-Sided Risk Arrangement (available in 2018)

Confused about the MACRA Quality Payment Program? In this fun video, Medical Web Experts helps healthcare providers understand what they need to do for MACRA in 2017.

Seven Best Ways to Prepare for MACRA Today:

Although 2019 seems far away, health systems need to start thinking about MACRA now. For the most part, health systems and physicians haven’t realized the impact of this shift; nor have they determined the right strategies. There are several things health systems can do to start preparing for MACRA now:

  1. Outline a strategy for tackling MACRA 
  2. Educate providers and encourage discussion about the new regulation.
  3. Attend professional society meetings and use the resources they offer. (Physician groups like the American Medical Association (AMA) and American Academy of Family Physicians (AAFP) are active in their efforts to train and advocate for physicians on MACRA. The American Hospital Association (AHA) provides online resources, including a webinar, to help systems prepare for MACRA.)
  4. Identify health system thought leaders and discuss APMs (ACOs, etc.).
  5. Take a look at your quality measures and identify high-performing areas.
  6. Review your CMS Quality Resource and Use Report (QRUR).
  7. If you did not report for PQRS or meaningful use, then evaluate the penalties and your readiness for MACRA.

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