CMA urges CMS to implement less burdensome, physician-led MACRA payment models

November 30, 2015
Area(s) of Interest: Advocacy MACRA 

The California Medical Association (CMA) is urging the Centers for Medicare and Medicaid Services to adopt principles that will assure access to high-quality care for all Medicare patients during the transition to the alternative payment models included in the Medicare payment reform legislation.

In April, President Obama signed into law the Medicare Access and CHIP Reauthorization Act (MACRA), which repeals the badly broken Medicare sustainable growth rate formula and replaces it with new payment systems. After more than a decade of fighting for change by CMA and others in organized medicine, the bill was passed in a monumental bipartisan action taken by Congress.

The MACRA payment models will largely take effect in 2019. It establishes two different payment systems in which physicians can choose to participate. It maintains the existing fee-for-service payment program and streamlines the existing burdensome reporting programs (PQRS, Value Modifier and Meaningful Use) into one new program, the Merit-Based Incentive Program (MIPS).

The MACRA fee-for-service program represents a vast improvement over current law, which no longer provides bonus payments and would have subjected physicians to up to 13 percent in penalties if they fail to meet the reporting requirements. The new program reduces the penalty impact and provides up to 9 percent in quality bonus payments with an additional 10+ percent in bonuses for exceptional performance. The upside potential in the fee-for-service program provides real opportunities for physicians to restore and improve their practices.  

The second payment track allows physicians to participate in alternative payment models that have yet to be defined. MACRA allows physicians to design and develop the models and submit them to CMS. This track will provide an automatic 5 percent bonus payment but requires physicians to accept some financial risk. It also requires physicians to participate in clinical quality improvement activities.

 “We believe that if properly implemented the new physician payment framework has the potential to reduce administrative burdens and promote improvements in the delivery of care for Medicare patients,” CMA wrote in a letter to Andy Slavitt, acting administrator of CMS.

To do this, CMA urged CMS to adopt several guiding principles, including:

  • Unnecessary administrative burdens in the current reporting programs must be reduced: CMA urged CMS to aggressively reduce the administrative burdens in the existing fee-for-service reporting programs.   The reporting requirements related to these programs are driving physicians out of the Medicare program and bear little relationship to the realities of medical practice and the delivery of quality care. 
  • New payment models should be physician-led: MACRA's new alternative payment models should be patient-centric and physician-led. We believe it is imperative for physicians to design and lead new health care delivery and payment models because physicians have the unique training and expertise to manage the provision of quality care.
  • Alternative models should allow for true innovation: California physicians and medical groups have led the nation in developing innovative clinical and quality improvement programs and unique health care delivery models. Many of these  models and new ones being developed don’t fit the current landscape of “alternative” payment models. CMA urges CMS to be open to innovation and allow these unique physician models to flourish under the MACRA rules. 
  • Administrative burdens must be reduced: Administrative burdens must be limited and reporting tasks streamlined so that the delivery of patient-centered care is the principal focus in all clinical settings, particularly small practices.
  • Total cost of care data must be available to help physicians manage care: If physicians are going to manage costs and accept some nominal financial risk in the alternative payment models, CMS must provide the appropriate Medicare claims data and share the total cost of care expenditure data (hospital, physician and drugs) so that physicians can appropriately project their costs and manage patient care. 
  • Risk-adjustment methods must recognize diverse patient populations: California has a diverse patient population, many of whom were uninsured and without appropriate medical care for years before they became eligible for Medicare. It is essential that CMS institute rigorous risk-adjustment related to  severity of illness, stage of disease, genetic factors, local demographics, race, ethnicity and the socioeconomic status of patients. 
  • Payments must continue to be adjusted for geographic differences in practice costs: Physician payment rates must continue to be adjusted for geographic differences in practice costs. California has eight of the highest cost regions in the country according to CMS data.  Medicare has always adjusted payment rates based on differences in practice costs and we urge this policy to continue. This is essential to ensure all patients have access to care. 


CMA is committed to working collaboratively and constructively with CMS and others to develop and share meaningful recommendations as regulations are prepared that will shape the delivery of health care services for years to come.

Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmadocs.org.


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