MACRA (Medicare Access and CHIP Reauthorization Act of 2015) has the potential to completely transform the structure of healthcare in the United States. In repealing the sustainable growth rate (SGR) formula used for physician reimbursement and payment purposes, MACRA has created a new philosophy on which to base all Medicare payment updates. Beginning in 2019, payment updates will reflect efficacy and proficiency, instead of volume. Various measures of efficiency and quality will assess a provider’s performance, and earnings will depend on these metrics.
MACRA provides for two new tracks — the Medicare Incentive Payment System (MIPS) and Alternative Payment Models (APM) — in which physicians can earn payment updates; it provides funding to benefactors for technical aid provided to physicians; and it provides capital for research, development, and testing of new APMs.
MIPS merges distinctive parts of three existing incentive programs—Medicare Electronic Health Record (EHR) Incentive Program, Value-based Payment Modifier (VM), and Physician Quality Reporting System (PQRS) Program—to simplify the administration of reporting and incentive payments. It also adds a new component: Improvement Activities.
APMs are new payment approaches that reward its participating providers for providing medically necessary care, cost-effectively. The quality performance metrics are similar to those of MIPS; however, those participating in advanced APMs may receive bonus payments in exchange for taking on some risk (cost-sharing) related to patients’ outcomes and meeting certain other parameters. Also, using certified EHR technology is a mandate for all participating providers.