As the Healthcare Industry is transforming from fee- for- service to value-based- service, Medicare Access and CHIP Reauthorization Act (MACRA) leads a way to reach value and quality. MACRA brings a powerful change in payment model.

Healthcare System aims to make people healthy by providing better care. And, this is achieved by focusing on incentives, care delivery, and information sharing.

MACRA prioritizes on quality than quantity. To deliver good care, a physician needs to perform well. And their performance should be evaluated and rated. Each physician is paid based on their individual rating score. This way of payment will improve care possibilities and lower cost associated with it.

MACRA will establish new reporting measures called Quality Payment Program (QPP). QPP opens two paths to reporting; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM). Physician or practitioner can choose any one of the models to participate in MACRA.

Merit-Based Incentive Payment System (MIPS)

MIPS will consolidate three existing programs which are Physician Quality Reporting System (PQRS), Value-Based Payment Modifier and EHR incentive program.

Physicians and practitioners who are evaluated under MIPS will have the score of 0-100. This score will either increase or decrease the payment by 4% to 9%.

An individual score is comprised of the following category (with relative weights)

1.Quality of care which replaces PQRS (50%)
2.Resource use which replaces value-based modifier program (10%)
3.Clinical Practice Improvement Activities (15%)

These activities are similar to PCMH. Clinical practices must have minimum 1 activity, and for every increase in activity, they will be awarded extra credits. Recognized PCMH will get full credit.

4.Meaningful Use certified EHR technology (25%)

EHR MU helps to advance care system. Ratings are given based on effective usage of EHR.

Based on this composite score, they will either receive positive, negative or neutral incentives. Starting from 4% of penalty or incentive in 2019 and it will gradually increase or decrease over years.

Physicians excluded from MIPS are:

The first year of Medicare providers
Provider’s Medicare patient volume below the threshold value
Eligible providers of APMs who qualify for the bonus payment

Alternative Payment Model (APM)<

APM is another approach to payment through Medicare. Most possible eligible players are ACO and PCMH. Not all providers of APM are eligible, but they still can participate in MACRA. In APMs, who are not Qualified Participants (QP) will receive a favorable score. If they participate their MIPS score will increase.

Meanwhile, eligible QPs come under Advanced APMs. Physicians of Advanced APMs are excluded from MIPS but will get a lump sum bonus payment of 5%. Also, they receive highest fee schedule update.

MACRA Impact on Small Practices:

Meeting the requirements of MACRA will be a time-consuming process for all small practices. They are at the high risk of facing negative payment adjustments during the first year implementation of MACRA.

CMS estimates there are 87% eligible solo practices clinicians and they all will face a penalty in 2019. On the other hand, large practices will receive positive payments.

To make this odd payment even, HHS announced they will spend $20 million per year for next 5 years in funding small practices to help them prepare for MACRA. Practices in remote areas will get benefitted from this program.

This could help them to improve their Clinical Practice Improvement Activities which will help in attaining the broader initiatives of CMS.