Understanding MACRA

What is MACRA?

The great majority of American physicians participate in Medicare today. For nearly every participating physician, reimbursement is a front-of-mind concern.

Until recently, doctors providing care to Medicare patients were subject to the Sustainable Growth Rate (SGR). Established in 1997 to control the rate of increase in spending on physician services, the SGR capped spending in aggregate for all Medicare-participating physicians. Total physician spending tended to exceed the overall budget target, which then triggered reimbursement rate cuts. Cutting compensation rates after the services were performed was popular with no one, for obvious reasons.

In effort to reform the Medicare payment system, on April 14, 2015, a bipartisan majority in Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The new law passed with a 392 to 37 vote in the House of Representatives, and a 92 to 8 vote in the Senate.

MACRA ushered in three major changes to the Medicare reimbursement protocol:

  1. Stopped the use of the Sustainable Growth Rate – the old formula for determining Medicare payments for health care providers.
  2. Created a new framework for rewarding health care providers for giving better care, not just more care.
  3. Combined the existing quality reporting programs into one new reporting and compensation system.

Without the passage of MACRA, physicians could have been subjected to negative payment adjustments of 11% or more in 2019 as a result of the Meaningful Use (MU), Physician Quality Reporting System (PQRS) and value-based modifier (VBM) reporting programs—with even greater penalties in future years. In contrast, under MACRA, the largest penalty a physician can experience in 2019 is 4%.

How Does MACRA Work?

By repealing the sustainable growth rate formula used for physician reimbursement and payment purposes, MACRA ushers in a new methodology on which to base all Medicare payment updates.

Beginning in 2019, payment updates will reflect the ability to produce a desired result, and proficiency, instead of volume. Various new measures of efficacy and quality will be used to assess a provider’s performance, and earnings will depend on these metrics.

As a temporary measure, MACRA replaces the SGR with annual 0.5% payment increases for each of the next five years, and gives providers two payment track options after that:


The Merit-based Incentive Payment System, or MIPS, replaces the Physician Quality Reporting System, Value-Based Modifier, and Meaningful Use of electronic health records programs.

Instead of three separate programs, MIPS is designed to be one cohesive program with a single score for each physician or group. The score will be derived from four key components:

  1. Quality: practitioners choose six measures to report to CMS that best reflect their practice. One measure must be an outcome measure or high-priority measure and one must be a crosscutting measure.
  2. Costs, or Resource Use: CMS will calculate these measures based on claims and availability of sufficient volume. practitioners do not need to report anything.
  3. Clinical Practice Improvement Activities: The rule offers more than 90 activities to choose from, allowing each practitioner maximum flexibility. practitioners participating in medical homes receive full credit, while those participating in APMs earn at least half credit.
  4. Advancing Care Information: practitioners will report key measures of interoperability and information exchange. practitioners are rewarded for their performance on measures that matter most to them.

Quality is the most important category right now, as it accounts for 60% of the practitioner’s overall score.

Each practitioners under the MIPS program receives a final score (from 1 to 100) and that number determines the amount of payment the practitioners is eligible to receive in 2019.

The newest component, Improvement Activities, is intended to give physicians credit for their efforts to reduce disparities in care, engage patients in shared decision-making, and other activities designed to improve care.


MACRA also creates payment incentives for physicians to receive a significant share of their revenue through Alternative Payment Models, or “APMs.” Providers participating in APMs can opt out of MIPS.

APMs include the Accountable Care Organization (ACO) models, patient-centered medical homes (PCMH), and bundled payments.

Accountable Care Organizations, or ACOs, are networked providers who assume “accountability” for the cost and quality of care for a defined, but diverse, population of patients. To participate in the shared savings incentive, ACOs are required to report on a number of quality metrics in order. For most ACOs, success requires an organization with extensive experience managing risk, and the analytical chops to identify and mitigate risk across varied patient populations.

The Patient Centered Medical Home, or PCMH, is a promising new model for transforming the organization and delivery of primary care. The PCMH is relationship-based medicine, with an orientation toward taking care of the whole person. As such, the PCMH delivers accessible care with shorter waiting times for urgent needs. The PCMH also demonstrates a commitment to quality improvement by using evidence-based medicine and decision-support tools to guide shared decision making with patients and families.

Physicians can also opt for the “Bundled Payments” route to MACRA participation. Bundled Payments, sometimes called “Episode Groups” is a bridge for some practitioners, as it does not upend the fee for service model completely. CMS’ Bundled Payments for Care Improvement, or BCPI, has shown how Bundled Payments helps practitioners to drive down Medicare per-episode payments, with no decline in patient care.

From 2019 to 2024, providers qualifying as APM participants will receive a 5% lump sum incentive payment for that year. Starting in 2026, participating providers will receive 0.75% fee schedule update while other providers will receive a 0.25% update.

Centers for Medicare & Medicaid Services (CMS) is also encouraging participation in Advanced APMs. Advanced APMs are a subset of APMs that let participating practices earn more rewards in exchange for taking on risk related to patient outcomes. Eligible practitioners who successfully participate in advanced APM entities that meet certain revenue or patient thresholds each year will receive a 5% bonus for each year from 2019 to 2024. Only eligible practitioners and groups that participate in qualifying Advanced APMs can receive the bonus incentive payments.

CMS defines an Advanced APM as a model that:

  1. Involves more than nominal risk of financial loss: Advanced APMs must accept risk for providing coordinated, high-quality care.
  2. Includes a quality measure component: Payments rely on quality measures that evidence-based, reliable, and valid and must include an outcome measure, if applicable.
  3. Features the use of certified EHR technology (CEHRT): 50% of Advanced APM participants are required to use CEHRT in the first year (the requirement jumps to 75% in the second performance year).

When Does MACRA Start?

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was overwhelmingly approved by Congress on April 14, 2015. CMS’s final MACRA rule confirms that implementation begins on Jan. 1, 2017.

While practitioner payment will not be impacted until Jan 1, 2019, CMS plans to use 2017 as the performance year for determining practitioner payment adjustments in 2019. During 2017, practitioners may start reporting data used for MIPS and APM determinations.

How athenaHealth and Quatris Healthco Makes MACRA Easier

MACRA requires that practices adapt to CMS’ new reimbursement rules. To do this successfully, practices must get better at managing and analyzing their patient data.

Practices that perform well against the new quality benchmarks while controlling costs for service will be financially rewarded by CMS. For practices that miss that reporting mark, their Medicare reimbursements will most likely shrink.

MACRA acutely highlights the need for accurate performance metrics, which are an outcome of updated workflows and consistent patient data you can trust. For practices already running the athenaPractice Solution, we recommend adding Clinical Quality Reporting (CQR) and Quality Submission Service (QSS) to your practice’s current software configuration.

Clinical Quality Reporting is our cloud-based reporting tool for Quality Payment Program (QPP) attestation.  With CQR in place, you can visualize year-to-date progress toward the practice’s reporting goals, see weekly measurement updates, focus on the measures that need the most improvement, and link to individual patient records as proof points. With CQR in place, you can make it easier to avoid payment adjustments for failing to submit data.

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