MACRA is the Medicare Access and CHIP Reauthorization Act of 2015. MACRA ends the Sustainable Growth Rate (SGR) formula that has been in place since 1997 (and was the source of decades of legislative fixes to prevent Medicare reimbursement cuts under the SGR).

MACRA creates two new payment methodologies for physicians and certain other providers:

(i) merit-based incentive payment system (MIPS); and

(ii) alternative payment model (APM).

The U.S. Health & Human Services Centers for Medicare and Medicaid Services (CMS) published a proposed rule regarding MACRA on May 9, 2016 (81 Fed. Reg. 28,161-28,686).

CMS released its MACRA final rule on October 14, 2016 (although this is a pre-publishing document and the final version may have minor editorial changes).

Importantly, under the methodologies implemented by CMS affected providers many providers will experience payment decreases although increases are possible.

  • A MIPS provider’s reimbursement will be increased or lowered based on performance compared to other MIPS providers. CMS expects around 90 percent of providers subject to MACRA to participate in MIPS.
  • An APM provider will receive a 5 percent annual bonus from 2019-2024, but have risk under qualifying payment arrangements (e.g. Next-Generation ACO).