The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) permanently repeals the flawed Sustainable Growth Rate (SGR) Medicare payment formula, establishes a framework for rewarding clinicians for value over volume, streamlines quality reporting programs into one system and reauthorizes two years of funding for the Children's Health Insurance Program (CHIP). The new Medicare physician payment system introduced by MACRA is called the Quality Payment Program.

The Quality Payment Program is comprised of two pathways in which clinicians will participate in order to receive Medicare payment: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). Most clinicians will participate in MIPS, which bundles the Physician Quality Reporting System, the Value Modifier and the Electronic Health Record (EHR) Incentive Program into one program. The Advanced APM track provides incentives for clinicians who participate in new payment models that incorporate financial risk.

Regardless of which pathway in which a clinician participates, he/she will be measured on four core components: QualityImprovement ActivitiesAdvancing Care Information and Cost. Under MIPS, these components make up the categories that comprise a clinician’s or group’s MIPS composite score. Under the Advanced APM track, these elements are incorporated into the way a specific model is designed and assessed.  

MACRA: Four core components: quality, clinical practice improvement activities (CPIA), meaningful use of certified EHRs and resource use.

MACRA Timeline

Beginning July 1, 2015, clinicians began receiving a 0.5 percent payment increase to Medicare payments. This payment increase will continue annually until Dec. 31, 2018. Starting in 2019, there will be two pathways for clinician payment: MIPS or participation in eligible APMs.

As the MIPS is implemented, performance-based bonuses and penalties will be phased in. Starting in 2026, annual payment updates will be determined by the eligible professional’s participation in eligible alternative payment models or traditional Medicare reimbursement linked to quality.


What MACRA Does

  • Repeals the Sustainable Growth Rate formula used for determining Medicare payments to clinicians. The SGR no longer exists.
  • Establishes a period of positive payment increases by providing an annual 0.5 percent payment increases for clinicians beginning July 1, 2015, and ending Dec. 31, 2019, to support a predictable transition from fee-for-service to quality-based payment.
  • Promotes the transition to quality-based payment by implementing two payment pathways for clinicians beginning in 2019: the new MIPS or an eligible APM.
  • Supports participation in eligible APMs by providing annual payment increases of 0.75 percent to those participating in a qualifying APM in 2026 and beyond, and 0.25 annual payment increases to all other clinicians.
  • Reauthorizes funding for the Children’s Health Insurance Program (CHIP) for two years through fiscal year 2017.
  • Prohibits implementation of 2015 Medicare Physician Fee Schedule provisions requiring the transition of all 10-day and 90-day global surgical packages to 0-day global periods.
  • Expands the use of Medicare data for transparency and quality improvement by removing barriers and allowing for Medicare data to be provided to qualified clinical data registries to facilitate quality improvement.
  • Requires that the HHS Secretary draft a plan for development of quality measures to assess professionals, including non-patient-facing professionals.
  • Declares a national objective to achieve widespread exchange of health information through interoperable certified electronic health record technology nationwide by Dec. 31, 2018.
  • Includes a provision that will protect clinicians by preventing quality program standards and measures (such as Physician Quality Reporting System/MIPS) from being used as a standard or duty of care in medical liability cases.