BUSINESS CONSULT
DAVE WOFFORD
Senior Manager, ECG Management Consultants
KEVIN CONTORNO
Senior Consultant, ECG Management Consultants
Making Sense of MACRA
T
he April 2015 signing of the Medicare Access and CHIP Reauthorization Act (MACRA) represented the most sweeping set of
changes to Medicare’s physician payment methodology in more than 2 decades. The bipartisan legislation repealed the sustainable growth rate (SGR), as
well as planned cuts to the Medicare Physician Fee
Schedule (PFS). In doing so, MACRA stabilizes updates to the Medicare PFS for the next 10 years and
establishes new incentives based on physician performance. Physicians and hospitals that understand the
implications of MACRA will be better positioned to
act now in order to achieve future success in a postMACRA reimbursement environment.
TABLE Physician Performance Categories Used to Determine Upside/Downside Risk
Payments in MIPS.
Incentive
Relative
Weighting
Brief Description
Quality
30%
Modeled after the existing Physician Quality Reporting System’s (PQRS’)
incentive payment adjustments
Meaningful Use
25%
Modeled after the existing meaningful use incentive system
Clinical Practice
Improvement
15%
New and largely undefined, but based on access, population management,
care coordination, beneficiary engagement, patient safety and practice assessment, and participation in an APM
Resource
Utilization
30%
Modeled after the existing Value-Based Payment Modifier Program
A Quick Overview
How does MACRA work? During the next 5
MHs). Compared to MIPS, APMs allow providers to Implications
years, CMS will roll out a two-track system
accept more risk with the possibility of greater reIt’s critical for providers to understand the implicacomposed of the Merit-Based Incentive Payment
wards. Participation comes with an annual service
tions of MACRA in order to prepare for the future
System (MIPS) and alternative payment models
bonus of 5% for the first 5 years, as well as a higher
challenges this act will entail. Specifically, MACRA
(APMs), each of which is intended to align incenaccumulative payment update (0.75%) beginning in
will likely impact physician compensation and hostive payments with outcomes.
2026. These incentives are designed to move propital/physician relationships.
Let’s start with the Merit-Based Incentive Payviders away from FFS toward APMs, a transition
Under MACRA, providers will attempt to align
ment System, otherwise called MIPS. The MIPS
that can occur gradually. To qualify for this track,
physician compensation structures with new methtrack resembles the existing Medicare PFS. Feea minimum percentage of a provider’s Medicare
ods of reimbursement. However, several factors will
for-service (FFS) payments will remain virtually
revenue must be received via APMs in a given year
make it difficult for providers to tie individual physiflat over the long term, while upside and downside
(FIGURE 2, on page 46).
cian compensation to performance under MIPS.
risk payments will be
incorporated based on
physician performance
FIGURE 1
in four categories, as
Physician Fee Schedule (PFS) Updates
shown in the TABLE.
Under MIPS, the
amount of FFS payments at risk will
Annual Update
Annual Update
Annual Update MIPS
increase over time,
reaching a maximum
downside potential in
2015–2019
2020–2025
2026 and beyond
2022 of 9% (FIGURE
1). If you perform
poorly, prepare to pay
Merit-Based Incentive Payment System (MIPS)
the price, as downside
penalties will pay for
MAX PENALTY
MAX PENALTY
MAX PENALTY
MAX PENALTY
upside bonuses.
!
!
!
!
LAST YEAR OF PQRS,
The second track
EHR, MU, AND PHYSICIAN
involves alternative payMAX REWARD
MAX REWARD
MAX REWARD
MAX REWARD
VALUE-BASED MODIFIER
ment models, or APMs,
+
+
+
+
such as accountable care
organizations (ACOs)
and patient-centered
2018
2019
2020
2021
2022 and beyond
medical homes (PC-
0.5%
ACC.org/CSWN
0.0%
0.25%
-4%
-5%
-7%
-9%
12%
15%
21%
27%
CardioSource WorldNews 45