Doing the MACRA-ena: Will the celebrations continue in 2016?

In April, American physicians—and many others who work in health care—celebrated when President Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) that repealed the Sustainable Growth Rate payment method used by the CMS.

In 2016, they will start to find out if the law that they don’t know is better than one that they did—and dreaded—when the MACRA’s first proposed regulations are rolled out for public comment.

“The Affordable Care Act did a lot for the financing of care and getting access and that side of things,” explains David Muhlestein, senior director of research and development at Leavitt Partners. “But in the delivery of care it didn’t do a lot. MACRA creates a very strong incentive for all physicians in America to move toward new ways of delivering health care.”

Physician Options Under MACRA
  • Merit-Based Incentive Payment System
    Blend of measures from Meaningful Use, Physician Quality Reporting System, and Value-Based Payment Modifier programs
  • Alternative Payment Model

MACRA will start making waves next year but it’s not scheduled to go into effect till 2019. The law gives physicians receiving Medicare payments two options. The Merit-Based Incentive Payment System (MIPS) is a new fee-for-service Medicare payment plan that combines three existing programs: Meaningful Use (of information technology), the Physician Quality Reporting System, and the Value-Based Payment Modifier.

Using a 0-to-100 point scale, a physician’s performance will be rated on quality, resource use, electronic records, and clinical practice improvement. Depending on their score, physicians will receive a 4% bonus or penalty at the end of the year. By 2022, 9% bonuses or penalties will be at stake.

The other choice under MACRA is the Alternative Payment Model (APM), which will offer doctors a 5% bonus and give them several avenues to earn it: care for patients in programs that use an alternative payment method, join an ACO, manage a significant number of Medicare Advantage patients, or work with a Medicaid managed care organization.

“We want physicians to manage populations successfully,” Muhlestein says. “To do that, they need to be paid differently, and now there is a strong incentive to move toward these alternative payment methods.”

Don’t expect every physician to embrace the changes. Some doctors, Muhlestein says, will argue that their patient population doesn’t lend itself to outcome-based payments. But most will see the writing on the wall, adjust, and sign up, in his opinion. Muhlestein predicts that by 2026, most doctors will receive most of their income through an alternative payment method that in some way ties compensation to outcomes and performance measures in a meaningful way.

“And that won’t just be in Medicare but across all payer types,” he says. “That is why I think MACRA may influence the delivery of care more than the ACA.”