Setting the record straight on MACRA

There is a growing awareness among physicians that the Medicare Access and CHIP Reauthorization Act (MACRA) makes important changes in how Medicare will reimburse them, as well as confusion about what will be different and what they should do to be ready.


With the release in April of Medicare's proposed rule to implement the Medicare Access and CHIP Reauthorization Act (MACRA), physicians' anxiety levels appear to be increasing. There is a growing awareness among physicians that MACRA makes important changes in how Medicare will reimburse them, starting as early as Jan. 1 of next year. Yet there remains a lot of confusion about what will be different and what they should do to be ready.

For sure, the anxiety is understandable, due in large part to the fact that physicians still don't know what the final MACRA payment rules will bring. Medicare has published a proposed rule for public comment, which means it may undergo considerable revisions before it is finalized. The final rule likely won't be out until October or November, giving physicians just a couple of months to get ready for changes that will go into effect in 2017. Given the tight timeframe, ACP will be urging CMS to make the proposed rule as easy to implement as possible, with the least amount of administrative burdens, so that internists in all sizes of practice will be able to participate successfully in MACRA with a realistic amount of time for preparation.

Some of the anxiety, though, may be overstated. MACRA won't, for example, destroy small practices as some critics allege. In a May 19 ACP Advocate blog post, “Relax, It's only MACRA,” online , I set out to factually counter some of the “sky-is-falling” hyperbole. But it is evident that there is still too much misinformation out there, so let's recap 5 ways that the new Medicare payment rules make things better for physicians compared to current rules.

1. MACRA makes things better by requiring CMS to reduce the burden of reporting. Long before MACRA, physicians have had their Medicare payments linked to measures of quality and value. Instead of the current 3 separate reporting programs—the Physician Quality Reporting System (PQRS), Meaningful Use, and Value-Based Payment Modifier—MACRA streamlines them into 1 and adds a new category, allowing physicians to get credit for reporting on Clinical Practice Improvement Activities (CPIA). Already, CMS has proposed a reduction in the number of quality measures that have to be reported and more flexibility in the Advancing Care Information program that is replacing Meaningful Use. The new CPIA category will offer more than 90 options for practices to get credit for many of the things they are already doing to improve quality.

2. MACRA's new quality reporting program allows physicians to earn positive payment adjustments. Under the current PQRS and Meaningful Use programs, the best they can do is avoid penalties. The new program allows physicians to earn positive payment adjustments each year of up to 4% in 2019, 5% in 2020, 7% in 2021, and 9% in 2022. The actual maximum positive adjustments each year could be less than this, depending on how many physicians fall above or below the threshold required to avoid downward adjustments. And top performers can earn up to 10% more each year.

3. MACRA's maximum potential penalties for failing to successfully report quality and cost data for the next 4 years are less than under the current reporting programs. Under the current reporting programs, physicians in 2017 could get a maximum downward adjustment of up to 8%: 2% from PQRS, 2% from Meaningful Use, and either 2% from the Value-Based Payment Modifier program (for physicians in groups of 2 to 7) or 4% (for groups of 8 or more). Under MACRA, the maximum downward adjustment a physician could get in 2019 (which CMS is proposing will be based on data submitted in 2017) is 4%, followed by 5% in 2020 and 7% in 2021. Only in 2022 and subsequent years would MACRA's maximum downward adjustment of 9% be greater than the current maximum downward adjustment of up to 8%.

4. MACRA requires that negative adjustments to physicians who fall below the scoring threshold for positive adjustments be redistributed to physicians who do score high enough to receive positive adjustments. Unlike the current PQRS and Meaningful Use programs, the money from any negative adjustments remains in the physician payment pool instead of Medicare keeping it. While such “budget-neutral” redistribution creates challenges, it's better than letting Medicare keep the money.

5. Under MACRA, the thousands of physicians in patient-centered medical home (PCMH) practices will have a leg up in earning higher Medicare payments. CMS is proposing that certified medical homes automatically qualify for the highest possible CPIA score. Some PCMHs will also qualify as Advanced Alternative Payment Models, making them eligible for 5% Medicare fee-for-service bonuses plus per-beneficiary payments ranging from $15 to $27 each month.

No law or regulation is perfect, and MACRA very much remains a work in progress. ACP will be recommending other improvements in comments submitted on the proposed rule. Extensive and continually updated resources to help ACP members be successful can be found online . And, like any changes that affect how physicians are paid, we have to be on guard for unintended adverse consequences.

I can say with confidence that compared to current Medicare quality reporting requirements, MACRA offers physicians more opportunities to earn positive adjustments, exposes them to less risk from negative adjustments through 2021, keeps all of the money from downward adjustments in the physician payment pool rather than Medicare's, and creates very substantial rewards for physicians in PCMHs as well as in other Advanced Alternative Payment Models.