Medical Malpractice News

What is MACRA?

Tags: , , , , , , , | Comments: 0 | December 8th, 2016

Every couple of years, seemingly out of nowhere, a new hot topic pops up in the healthcare industry. Not long ago HIPAA compliance was all that was talked about, before that RAC Audits, SGR fix, Affordable Care Act, and on and on.  With each new push for something new comes a new wave of fear in the medical community.  The latest buzz in healthcare seems to be MACRA, MIPS, and APMs, and the anxiety is rising as providers try to understand how it works, and how it affects them.  In the next few weeks, we will present a series of blogs summarizing MACRA and the changes that come with it to help physicians prepare for the changes.

According to the Centers for Medicare and Medicaid Services (CMS), MACRA is a change in the way Medicare reimburses physicians for healthcare services.  As part of the Quality Payment Program (QPP), the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, provides 3 major changes in physician payments.  First, it put an end to the Sustainable Growth Rate (SGR), which was the previous formula for paying physicians.  Second, MACRA rewards physicians for quality of care rather than paying by volume of patients.  And last, MACRA creates a new reporting system combining other previously successful systems into one.

With the goal of making Medicare better, MACRA helps providers focus on quality of care and replaces the Sustainable Growth Rate (SGR), which was designed to keep growth in spending for Medicare slower than the U.S. GDP. However, the SGR turned out to be not sustainable, and it was put to rest in 2015.  From that point on Medicare reimbursements increase by 0.5% per year for the next 5 years.  Providers can choose between 2 payment options: MIPS or APMs.


CMS explains the Merit-Based Incentive Payment System (MIPS) as a combination of 3 payment programs already in place, and it provides incentives through measuring four metrics: Quality, Efficiency, Meaningful Use, and Clinical Practice Improvements.  Providers will be assessed and given a score between 0 and 100 and will have payment adjustments based on their score.  Most physicians will be in MIPS.  Physicians who will not participate in MIPS are those in their first year of Medicare Part B participation, those with Medicare patient volume below 100, and those participating in APMs.

The Advanced Alternative Payment Model (APMs) gives incentives to providers to move Medicare away from Fee-For-Service programs and toward payment based on patient outcomes and Population Health. APMs are designed for physicians participating in ACOs, PCMHs, or bundled payment programs.  APM providers will receive an annual lump sum bonus of 5% starting in 2019.

Providers choose which plan to participate in based on practice size, specialty, locations, or patient population. CMS has a very good overview of MIPS and APMs here.

What does this mean for practitioners and hospitals?

For both hospitals and practitioners MACRA means risk for payment adjustments. Of course there are incentives and ways to increase reimbursements, but compliance and proving qualifying measurements may mean a larger portion of physicians’ payments are at risk.  The American Hospital Association suggests this may mean a continued shift in hospital-physician relationships and more collaboration.

While MACRA is a very complex and detailed program, we are trying to provide a high level summary to put it in its simplest form. Our next post will dig a little deeper into the details of MACRA and try to help providers understand what new requirements there are and how to meet them.

We understands that things are always changing in healthcare, and we’re here to help you navigate the changes so you can focus on providing the highest quality of care.  Physicians and other practitioners look to eQuoteMD when they need help finding the best medical professional liability insurance at the best rate.  Get a quote today for any specialty in any state.