What Is the Purpose of MACRA?
MACRA is the result of healthcare reform initiatives throughout the 20th century. Essentially, it is the pin in the timeline, marking where we are today, as a nation, in our commitment to providing maximum quality healthcare at optimal affordability.
But the enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and its sweeping payment reform under Medicare Part B—to say nothing of its complex and high-stakes requirements—wasn’t exactly received as good news by healthcare providers.
MACRA regulations, spelled out in nearly 2,000 pages, posed quite an administrative burden on medical organizations and unleashed widespread confusion.
In 2016, just prior to MACRA Year 1, the Physicians Foundation survey reported that only 20% of primary care physicians were “somewhat familiar” with MACRA regulations. Not too much changed toward the end of MACRA Year 1, according to the 2017 AMA/KPMG survey, which found that fewer than one of four physicians considered themselves “well prepared” to meet MACRA’s Quality Payment Program (QPP) reporting requirements.
But providers, practice managers, and medical coders gradually wrapped their minds around MACRA’s massive legislation. Still, MACRA remains a thorn in the flesh for many. After all, MACRA Year 1, Year 2, Year 3, Year 4 … the program continues to evolve, requiring physicians and healthcare business staff to evolve, to relearn the myriad nuanced updates to MACRA reporting regulations year after year.
PURPOSE IS KEY TO EMBRACING MACRA
While MACRA presents numerous challenges, MACRA also has its rewards. Of course, MACRA could also mean penalties. Given the amount of revenue at stake for organizations struggling for gains amid mounting reimbursement pressures, MACRA can prove difficult to embrace.
But remember, MACRA is reform. Stepping back to gain perspective on MACRA and its role in safeguarding the availability of quality medical care in the U.S. will help to onboard both urban and rural medical practices with this vital program.
In a sense, MACRA has been a century in the making. Consider that during this century America has become home to an aging population. By 2020 an estimated 17% of the U.S. population will be 65 or older. That’s 50 million men and women with an escalated reliance on healthcare. And by 2030 the last of the baby boomers, 76.4 million people or 20% of Americans, will have moved into the ranks of the older population, with the eldest of this group—8.7 million people—age 85 and older.
MACRA, we can all agree, arrived in the nick of time.
MACRA & THE HISTORY OF HEALTHCARE REFORM
Supported by progressives campaigning for sickness insurance guaranteed by the states, Republican presidential candidate Theodore Roosevelt initiated efforts to gain universal healthcare coverage. He was, however, defeated in the 1912 presidential election.
Democratic President Franklin D. Roosevelt included a publicly funded healthcare program while drafting provisions to Social Security legislation. Healthcare funding, though, was eliminated from the final legislation.
As a part of his Fair Deal, President Harry Truman called for universal healthcare.
Although opposition considered Lyndon B. Johnson’s proposal un-American—socialized medicine that would oppose and hamper the quality of healthcare—Johnson succeeded in signing into law the Social Security Act of 1965, which led to the creation Medicare and Medicaid.
Massachusetts Democratic Senator Ted Kennedy introduced a bipartisan national health insurance bill. This led to the first congressional hearings on national health insurance in twenty years and began Kennedy’s decade-long role as chairman of the Health subcommittee of the Senate Labor and Public Welfare Committee.
Republican President Richard Nixon signed the Social Security Amendments of 1972, extending Medicare to persons under 65 with end-stage renal disease (ESRD) or a minimum two-year history of severe disability.
Nixon proposed an employer mandate to offer private health insurance if employees volunteered to pay 25% of premiums. He also proposed a replacement of Medicaid by state-run health insurance plans available to all with income-based premiums and cost sharing, as well as a replacement of Medicare with a program eliminating the limit on hospital days and adding income-based out-of-pocket limits and outpatient prescription drug coverage.
Kennedy and Arkansas Democratic Representative Wilbur Mills introduced a bill with benefits nearly identical to Nixon’s failed 1974 plan—modified only to include mandatory participation by employers and employees through payroll taxes and with lower cost sharing. This, too, was criticized for substantial cost sharing.
During the worst recession since the Great Depression, Republican President Gerald Ford announced that he would veto all health insurance reform proposals.
President Ford proposed adding catastrophic coverage to Medicare, offset by increased cost sharing.
Democratic presidential candidate Jimmy Carter proposed universal healthcare, based largely on key features of Kennedy’s universal national health insurance bill.
President Carter told Kennedy to change his bill to minimize federal spending and avoid disruption of federal budget balance through a phase-in implementation.
After Carter refused to commit to a bill with a fixed schedule for phasing-in comprehensive coverage, Kennedy severed his alliance with Carter.
Kennedy proposed a bipartisan universal health insurance bill that included the choice of competing federally-regulated private insurance plans with no cost sharing (financed by income-based premiums via an employer mandate and individual mandate). The proposal also included a replacement of Medicaid by government payment of premiums to private insurers and the enhancement of Medicare (adding prescription drug coverage and eliminating premiums and cost sharing).
Carter proposed more limits to health insurance reform—an employer mandate to provide catastrophic private health insurance, plus coverage without cost sharing for pregnant women and infants and the federalization of Medicaid with extension to the poor without dependent minor children.
Employees won the ability to continue health insurance coverage after leaving employment through the Employee Retirement Income Security Act of 1974 (ERISA), amended by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
Headed by first lady Hillary Clinton, President Bill Clinton launched an effort to establish universal healthcare. The proposal included mandatory employer-provided health insurance through a regulated marketplace of health maintenance organizations—and mandatory enrollment in an insurance plan, as well as subsidies to guarantee affordability across income levels.
Although the Clinton plan crumbled under negative campaigns funded largely by the health insurance industry, a compromise was negotiated and passed by the 105th Congress, enacting the State Children’s Health Insurance Program (SCHIP).
Republican Ohio Representative John R. Kasich introduced the Balanced Budget Act of 1997, which was known in the House of Representatives as the Child Health Assistance Program of 1997, the Expansion of Portability and Health Insurance Coverage Act of 1997, and the Veterans Reconciliation Act of 1997. Signed into law by President Clinton, the Balanced Budget Act amended Section 1848(f) of the Social Security Act and changed key components of Medicaid to help improve and expand Medicaid. The Medicare Volume Performance Standard (MVPS), which had been used by the Centers for Medicare & Medicaid Services (CMS) to control costs, was replaced with the Medicare Sustainable Growth Rate (SGR).
A “strange bedfellows” proposal intended to seek common ground in expanding coverage for the uninsured was launched by the Health Insurance Association of America in partnership with Families USA and the American Hospital Association.
Republican President George W. Bush ensured a prescription drug plan for elderly and disabled Americans by signing the Medicare Prescription Drug, Improvement, and Modernization Act into law.
Michigan Democratic Representative John Conyers introduced The United States National Health Care Act in the House of Representatives, and Oregon Senator Ron Wyden introduced the Healthy Americans Act in the Senate.
Democratic Representative and Chairman of the Ways and Means Health Subcommittee Pete Stark launched a proposal to offer a public health insurance plan that was said to compete with private insurance plans. (Stark’s proposal has since been credited as the basis of the eventual Obamacare.)
The America’s Health Insurance Plans put forth proposals involving comparative effectiveness research, disease management and prevention, medical liability reform, pay-for-performance, and health information technology to reduce the projected growth in healthcare spending by 30% and result in a cumulative five-year savings of $500 billion.
Arizona Republican Senator John McCain proposed the Guaranteed Access Plan, based on open-market competition and involving a replacement of special tax breaks for persons with employer-based healthcare coverage with a universal system of tax credits to be available to Americans regardless of income, employment, or tax liability.
Democratic Presidential Candidate Barack Obama proposed a universal healthcare plan that called for the creation of a National Health Insurance Exchange, which would include private insurance plans and a federal option to be guaranteed regardless of health status.
In response to the Great Recession, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA). While the focus of ARRA was to save and create jobs, the stimulus package also poured $155.1 billion into healthcare to subsidize recession-related costs. Additionally, ARRA enacted the Health Information Technology for Economic and Clinical Health Act, or HITECH. The HITECH Act initiated the use of computerize medical records, which helped to facilitate the Affordable Care Act.
On March 23, supported by Democratic control of both houses of Congress, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA)—or the Affordable Care Act (ACA). Also known as Obamacare, the ACA represented the most significant regulatory overhaul of the U.S. healthcare system since the 1965 establishment of Medicare and Medicaid.
The version of the ACA signed into law, however, fell short of the intended plan. On March 30, Obama signed the Healthcare and Education Reconciliation Act, which, by means of the reconciliation process, allowed amendments to the ACA. Key revisions now written into the ACA included increased tax credits to buy insurance and the guarantee that doctors treating Medicare patients would receive full-rate reimbursement.
President Obama signed the Medicare and Medicaid Extenders Act of 2010 into law, which delayed the enactment of the SGR until January 1, 2012 and prevented a 25% decrease in Medicare reimbursements from taking effect on January 1, 2011.
Obama signed the Middle Class Tax Relief and Job Creation Act of 2012, which again delayed the implementation of the Medicare Sustainable Growth Rate until January 1, 2013.
Congress passed the American Taxpayer Relief Act of 2012, which stated that the SGR conversion factor for 2013 “shall be zero percent.” This act pushed back implementation of the conversion factor until January 1, 2014.
The SGR was set to trigger the next set of Medicare reimbursement cuts on April 1, 2014. To prevent cuts of 24%, the House and Senate backed the Protecting Access to Medicare Act of 2014 to delay the SGR cuts on Medicare physician payments until March 2015. This law amounted to another temporary fix to the problem introduced by Balanced Budget Act of 1997 and did not repeal the physician payment cut imposed by the Medicare SGR.
Enter Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Passing with enormous bipartisan support and signed into law by President Obama, MACRA revised the Balanced Budget Act of 1997—providing a permanent fix to the payment system for physicians treating Medicare patients. And in shifting the payment paradigm from fee-for-service to value-based care, MACRA revolutionized healthcare. MACRA represents one of the largest scale changes to the U.S. healthcare system, second only to the Affordable Care Act passed in 2010.
Also, as inferred by its name, MACRA maintains the Children's Health Insurance Program (CHIP)—previously known as the State Children's Health Insurance Program (SCHIP)—which is administered by the U.S. Department of Health and Human Services (HHS) and provides matching funds to states for health insurance to uninsured children in families with low incomes just slightly above the level to qualify for Medicaid.
Are MACRA & the ACA the Same?
As seen in the century-long struggle for healthcare reform in America, the U.S. has only recently gained significant ground—first with the passing of the Affordable Care Act (ACA) and then with the implementation of Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
It remains important to understand the differences between the ACA and MACRA in terms of the future.
The ACA has ignited partisan contempt from day one, and the controversy hasn’t diminished. While still on the campaign trail, President Obama’s eventual successor, Republican Donald Trump, promised to repeal the ACA. President Trump’s fight to modify provisions of Obamacare began with his proposed American Health Care Act. Regardless of who is in office, stakeholders agree that the future of the ACA is tenuous, consistent with many revolutionary changes in the early years.
But MACRA is not on the chopping block. MACRA is here to stay.
Not one representative or senator has their sites on a MACRA takedown. The Medicare Access and CHIP Reauthorization Act of 2015 passed with enormous bipartisan support and will endure as a catalyst to ongoing improvements in the quality of U.S. healthcare.
Last Reviewed on Jan 7, 2020 by AAPC Thought Leadership Team