In 2015, the Medicare Access and CHIP Reauthorization Act was passed, and by 2019, healthcare providers will begin to see its impacts on Medicare payments. It replaces Medicare’s current reimbursement schedule—which was based on a sustainable growth rate (SGR) formula—with one that is based on various metrics designed to measure quality of care.
Merit-Based Incentive Payment System
Instead of SGR, MACRA will implement a new program called the Merit-based Incentive Payment System, or MIPS, to determine how much healthcare providers will receive for providing Medicare services. MIPS combines aspects of several other systems, including:
- The Physician Quality Reporting System (PQRS)
- The Medicare Electronic Health Record (EHR) Meaningful Use (MU) incentive program
- The Value-based Payment Modifier (VBM)
- Accountable Care Organizations (ACOs)
The criteria in these measurement systems will be used to assess the care that healthcare providers give their patients in four categories:
- Quality
- Meaningful use of electronic hospital records, technology, etc.
- Clinical practice improvement
- Resource use
The goal here is to assess hospitals on the overall quality of care they give rather than the volume of patients they treat. MACRA also offers incentives to providers who participate in Alternative Payment Models (APMs). Extra incentives are available for providers who are in the highest level APMs.
Impact of MACRA
While MACRA won’t impact payments until 2019, those changes will be based on performance measurements made this year. Therefore, it’s important for hospitals, doctors, practices, and other members of the healthcare industry to familiarize themselves with the standards set forth in the programs described above (PQRS, EHR, etc.).
Overall, adjustments made to payments have a maximum of 9% per year. Positive adjustments are kept to an increase of three times that amount, so the effective range is -9% (a loss) to +27% (gain) by 2022.
Preparing for MACRA
In order to prepare for the changes that will be brought about by MACRA, healthcare providers need to make sure they’re doing the following:
- Educate themselves further on MACRA
- Make sure their use of technology benefits patients
- Examine their performance under PQRS and determine opportunities for improvement
- Review Quality and Resource Use Reports
- Seek legal counsel for minimizing liability issues and improving compliance
If you need assistance understanding MACRA, MIPS, or the changes your practice must make to transition to the new system, consult your local health law attorney for guidance.