On October 14, 2016, the Centers for Medicare and Medicaid Services (CMS) issued the final rule to implement the Medicare Access and CHIP Reauthorization Act of 2015, known as MACRA. The final regulation represents a significant improvement over the existing Medicare payment system and quality reporting programs. 

The California Medical Association (CMA), the American Medical Association (AMA) and 788 other physician organizations supported the MACRA legislation because it reduces the administrative burdens in the Medicare fee-for-service quality and electronic health record (EHR) reporting programs. The MACRA legislation and the implementing regulations revised the existing reporting programs and will significantly reduce the administrative burdens on physicians. Contrary to popular myth, MACRA does not create new reporting burdens. 

 Legislative intent

• Repeal the Medicare sustainable growth rate (SGR) formula, which threatened payment cuts and stagnated physician payments for over a decade.
• Allow physicians to develop innovative physician-led alternative payment models.
• Provide stable annual updates in the Medicare fee-for-service program.
• Consolidate, streamline and reduce the administrative burdens in the Medicare quality and EHR meaningful use reporting programs.  

Penalties lower, bonuses higher
Before MACRA, physicians were facing double-digit SGR payment cuts and 11 to 13 percent or more in payment penalties for not meeting the all-or-nothing requirements in the three Medicare reporting programs (Physician Quality Reporting System, EHR Incentive Program and Value-Based Payment Modifier).

Under MACRA, physicians will be exempt from penalties in 2019 if they report on just one quality measure in 2017.  In 2020, the maximum penalty is 5 percent, eventually going up to a maximum of 9 percent in 2022, but physicians would have faced much higher penalties under the pre-MACRA payment rules. Before MACRA, the Medicare bonus payments had all expired. MACRA restores bonus payments of up to 9 percent, plus an additional bonus for exceptional performance.

Click here to see a chart that compares current law payments, bonuses and penalties to MACRA.

Improvements over current law
Though not perfect, the final MACRA rule, which takes effect January 1, 2017, is clear improvement over current law. While CMA is still reviewing the final rule, below are key improvements that CMA and AMA fought to achieve:

• Restores the 0.5 percent payment update for 2017.
• Exempts one-third of all Medicare physicians from MACRA's Merit-Based Incentive Payment System (MIPS) reporting program.
• Eliminates all of the meaningful use and value modifier quality measures.
• Reduces by half the remaining number of measures that physicians must report, from 30 to 15. Small and rural practices must report on even fewer measures.
• Eliminates the EHR Clinical Decision Support and Computerized Physician Order Entry measures.
• Eliminates penalties in 2019 (for the 2017 performance period) for physicians who report for one patient on one quality measure, one improvement activity OR the four EHR measures.
• Only requires physicians to report for 90 days in 2017 to receive a bonus in 2019.
• Only requires physicians to report on 50 percent of their patients in 2017 for the quality category.
• Mostly eliminates the pass/fail system and provides proportional credit for the measures that are met.
• Providers will not be scored on "resource use" (physician cost) in 2017
• Expands the types of alternative payment models (APM) that can participate in MACRA, most notably Track 1 accountable care organizations. The final rule also reduces the financial risk requirements for APMs.

CMA will continue to fight for improvements to the MACRA regulations and the law to reduce the administrative burdens and open up more opportunities for fair payment. 

For a summary of the final MACRA rule, visit https://qpp.cms.gov.

Physicians can also visit CMA’s MACRA resource center at /macra to access information and resources to help with the transition. The center is a one-stop-shop with tools, checklists and information from CMA, CMS, AMA and national specialty society clinical data registries. CMA will add an updated summary and materials, including additional webinars, to the resource center in the coming weeks.