MACRA 101: The New Medicare Payment System and Its Impact on Early Careers

Congress implemented the Medicare Sustainable Growth Rate (SGR) as part of the Balanced Budget Control Act of 1997 in an attempt to control the rising costs of Medicare payments for physician services. The flawed formula sought to limit clinician reimbursement by tying updates to targeted spending growth in the economy rather than to the quality of care delivered by providers. As a result, since 2002, at the desperate urging of Medicare patients and the clinicians who care for them, Congress was forced to step in – often several times a year – with short-term legislation or "patches" to avert steep cuts to reimbursement. Seventeen patches since 2002 created a gigantic fiscal hole that threatened a 21 percent cut to Medicare reimbursement at the end of the first quarter of 2015.

Thankfully, on April 16, 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which not only repealed the severely flawed SGR formula that had been plaguing clinicians for nearly two decades, but replaced it with a novel approach to Medicare reimbursement that will directly affect how cardiovascular team members deliver care now and in the future.

MACRA's passage into law is the culmination of over two years of close collaboration with members of Congress on both sides of the aisle and a broad array of stakeholders, including the ACC. The law touches upon many areas across the health care spectrum and will have a profound effect on the future stability of the healthcare market place.

The effects of MACRA are immediately evident. This legislation prevented a devastating cut to Medicare reimbursement while also ushering in stability through positive annual payment updates of 0.5 percent starting July 1 of this year through December 31, 2018. Beginning in 2019, clinicians will choose from one of two payment pathways: the Merit-based Incentive Payment System (MIPS) or Alternative Payment Models (APMs).

MIPS is a streamlined consolidation of Medicare's current quality reporting programs. This means that the Physician Quality Reporting System (PQRS), the Meaningful Use electronic health record (EHR) program and the value-based payment modifier will expire at the end of 2018 and will be replaced with MIPS.

Performance evaluation under the MIPS program will be based upon four categories: clinical quality, resource use, meaningful use and clinical practice improvement activities. The four categories will utilize quality measures already in place under the existing Medicare quality reporting programs. Additional measures will be defined and further developed through the rulemaking process in close partnership with medical specialty societies, such as the ACC. Clinicians who score well in the MIPS program could receive substantial bonuses. Maximum bonus adjustments will begin at 4 percent in 2019, gradually increasing to 9 percent in 2022 and beyond.

As mentioned above, the second payment pathway is participation in Alternative Payment Models (APMs). Clinical professionals who opt to participate in an APM and receive at least 25 percent of their Medicare revenue through an APM beginning in 2018 will receive a 5 percent payment bonus. In order to continue incentivizing movement toward APMs, the threshold for receiving the 5 percent APM bonus will increase to 50 percent of Medicare revenue, or combined Medicare and all-payer revenue received through an APM in year 2021. The threshold will continue to increase over time, reflecting the commitments made by the Centers for Medicare and Medicaid Services (CMS) and private payers to move toward value-based payment models. Whichever pathway you end up taking, the ACC will be there to help you navigate the process and understand these complex new systems.

While the impact of MACRA on clinicians and their practices will take years to play out, the passage of this landmark bill is a prime example of the tremendous importance of participation in the advocacy process. It took countless meetings, phone calls, and visits to congressional offices by thousands of ACC members over the course of more than a decade to bring about the end of the SGR. As a new era in Medicare payment begins, the cardiology community must maintain its engagement to ensure that the new law is implemented in a way that enables us to continue to provide the highest quality care to our patients.

For more information on MACRA, check out ACC Advocacy's MACRA Primer or contact

By Jacqueline Green, MD, MPH, member of the ACCPAC Board, and Benjamin Galper, MD, MPH, member of the ACC's Advocacy Steering Committee.