MACRA: What Is It, and Will It Help or Hurt Your Practice?


Nearly half of U.S. doctors are unfamiliar with the Medicare Access and CHIP Reauthorization Act of 2015, otherwise known as MACRA, according to a new survey by Deloitte. Yet the proposed rule’s shift from fee-for-service to pay-for-performance will drive health care for the foreseeable future and dramatically impact doctors, particularly those in solo and small-group practices.

Will MACRA really improve care delivery and reduce costs? Or will it increase doctor burnout and kill off small practices, as some pessimists predict? Find out what you need to know about MACRA, the potential threats, and what your options are going forward.

How MACRA changes Medicare payments

MACRA makes some important changes to how reimbursements are made to healthcare providers who treat Medicare patients. According to the Centers for Medicare & Medicaid Services (CMS), MACRA replaces “a patchwork system of Medicare reporting programs” into one new, flexible system. Medicare’s Sustainable Growth Rate formula has been replaced with what CMS calls the Quality Payment Program (QPP).

The Quality Payment Program has two tracks: first is the Merit-Based Incentive Payment System (MIPS), which is what most doctors will participate in initially. The MIPS is a new program that combines parts of the Physician Quality Reporting System (PQRS), the Value Modifier (VM or Value-based Payment Modifier), and the Medicare Electronic Health Record (EHR) incentive program into one single program in which Eligible Professionals (EPs) will be measured on four key categories: quality, resource use, clinical practice improvement, and meaningful use of certified EHR technology.

CMS will review the data reported and determine which providers meet the requirements for the Advanced Alternative Payment Models (APMs) track, for doctors more accustomed to pay-for-performance based on quality and cost-control measures. To qualify for this track, doctors are required to use certified EHR technology, and bear a greater amount of financial risk or qualify as a Medical Home Model. Accountable Care Organizations (ACOs), Patient Centered Medical Homes, and bundled payment models are some examples of APMs, states CMS. Doctors are not locked into one track; they can switch between MIPS and APMs annually.

MIPS and APMs will go into effect over a timeline until 2021 and beyond, states the CMS website.

Why were these changes made? As Medscape explains it, MACRA is intended to be a different approach to cost efficiency that emphasizes “value-based” health care. “The idea is that the traditional model of paying physicians a fee for service encourages overtreatment. The new models are meant to reward outcomes instead.”

Healthcare IT News puts it this way: “Congress intended MACRA to be a transformative law that constructs a new, fast-speed highway to transport the healthcare system from its traditional fee-for-service payment model to new risk-bearing, coordinated care models.”

Outlook ‘glum’ for doctors

MACRA may sound good in theory, but most doctors aren’t convinced. Some are downright defeated. Roughly one third of doctors in small practices said the most likely fallout from MACRA will be mergers with larger group practices, according to a Medscape survey. “Death by bureaucratic strangulation,” wrote one emergency medicine physician.

Even CMS warned doctors to expect a “glum outlook” on the new payment system, reports Medscape. In proposed MACRA regulations issued on April 27, 2016, CMS estimated that most doctors in groups with fewer than 25 clinicians in MIPS will get penalized in 2019 on the basis of their low performance scores in Medicare incentive programs. Failure to report data was the biggest offense. Whether MACRA’s EHR documentation requirements will be less burdensome than Meaningful Use remains to be seen.

Solo practitioners fare the worst under MACRA, with a projected penalty rate of 87 percent. In contrast, CMS estimated that 81 percent of doctors in groups with 100 or more clinicians will earn a bonus.

It’s important to note that the program is still in its early stages and there are a lot of unknowns. CMS admitted that “considerable uncertainty” surrounds these estimates, since doctors may respond differently to this program than to other Medicare incentive programs.

CMS Acting Administrator Andrew Slavitt told Medscape that his agency will strive to make the new payment plan easier for small practices to master as it fine-tunes its regulations, which are expected to be finalized this fall.

What are your options?

Despite the dire outlook, doctors do have choices. For one, practices can simply opt out, as with Meaningful Use. Almost four in 10 doctors in solo and small group practices predict an exodus from Medicare due to MACRA’s new payment plan and its “punishing penalties,” according to the Medscape survey. Depending on your patient base, the shift to MACRA might be a good time to assess whether opting out of Medicare entirely is right for your practice.

Another tactic is to offset decreasing reimbursements by focusing on elective procedures you can offer that benefit your patients and boost your bottom line. For eye care professionals, establishing a Dry Eye Center of Excellence (DECE) is one way to do that. (For more information on starting a DECE in your practice, stay tuned for our new eBook. Subscribe to our newsletter so you don’t miss it!)

If there’s any good news about MACRA, it’s that there is still time to get up to speed on whether and how it will impact your practice. Check out the Medical Economics article, “7 things physicians need to know about MACRA proposed rule.” Also, the CMS website offers webinars, FAQs, and other resources for doctors to better understand MACRA.

Will MACRA negatively affect your practice? We want to hear from you so let us know your response by answering our Twitter poll.

Sign up for the Rendia Insider

Monthly update from experts in the field aimed to improve efficiency in your practice.