MACRA: Improving & Strengthening Medicare for All Beneficiaries

Oct 25, 2016

For nearly two decades, Medicare paid physicians based on volume rather than the, quality of services they provided. While others in health care were experimenting with ways to reward better care for patients, Medicare was locked into an outdated payment model known as the Sustainable Growth Rate (SGR).

The cost of fixing the flawed SGR, coupled with a lack of agreement on how to do so, kept Congress from making progress on a better payment model. Congress instead passed 17 patches to temporarily fix the problem with no permanent solution. In the meantime, the health system moved on – and academics and health systems alike gave thought on where to go next.

Then, in 2010, Congress passed the Affordable Care Act (ACA). Building on successes in the private sector, the ACA gave Medicare new tools to experiment with ways to pay physicians for aligning incentives and ensuring patients were getting value for their dollars. The ACA had three main goals for how to better pay physicians and eliminate the flawed SGR.

First, the ACA created the new Center for Medicare and Medicaid Innovation (CMMI). This Center was the first time that Medicare had broad tools and flexibilities to try new approaches to payment that would improve quality and reduce costs. For example, the Innovation Center created the Comprehensive Primary Care initiative that paid doctors in small physician practices an extra fee to more holistically treat patients and coordinate their care. These participating physician practices have met patient quality goals and many have reduced Medicare costs. Second, the ACA required Medicare to implement new payment models that encouraged collaboration and patient-centered approaches to care, known as Accountable Care Organizations (ACOs) and Medical Home Models. ACOs encourage health care providers to work together to provide coordinated, quality  care for Medicare beneficiaries, all while reducing costs for Medicare. Third, the ACA encouraged that physicians’ payments be tied to value of care through the value-based payment modifier. This program is aimed at rewarding the value of services, and not just the number of services doctors provided.

In 2015, Congress passed the bipartisan Medicare Access and CHIP Reauthorization Act (MACRA), which built upon the ACA to advance better, more value-based care and incentivize physicians for providing efficient, high-quality care to Medicare beneficiaries.

And earlier this month, The Centers for Medicare & Medicaid Services (CMS) finalized the rules to implement this bipartisan law, moving toward better care and smarter spending.

MACRA is another step in encouraging value over volume in health care, building on the work started by the ACA. At the heart of MACRA is the premise of rewarding physicians for improved patient care, coordination, and flexibilities to find the care system that works best for individual practices. While practitioners in the United States provide quality medical care, we know that not all health care markets function the same way. What works best in rural areas might not work well in our big cities or suburban areas. MACRA therefore provides flexibility for physicians to practice medicine how they know best, while maintaining accountability for quality, value-based care for beneficiaries.

Additionally, Medicare providers ready to take the next step can earn bonus payments for participating in Advanced Alternative Payment Models (APMs). These Advanced APMs build on the work of the ACA and tie Medicare payments to quality and value, instead of fee-for-service, which simply rewards physicians based on volume of care. APMs are not one-size-fits-all, but rather are multi-faceted so physicians can find a model that best suits their practice style. And building on the flexibilities that CMMI has already encouraged, the new bipartisan law allows for providers to suggest new models, new ideas, and new ways forward to improve health care. MACRA builds upon the work of CMMI by making it the hub of new model development and central to the qualification of bonus payments for physicians for participating in the Advanced APMs.

Through MACRA, all physician payments will be tied to quality for the first time. For the practices already experienced at new delivery models and for those small practices just beginning to engage in new care models, MACRA provides incentives for all physician practices, to provide Medicare beneficiaries with better, smarter care.

The bottom line is that the new rules foster better health care at lower costs for Medicare beneficiaries by focusing on quality and accountability. The Administration has given a ramp-up period under the rule, and Democrats and Republicans must work together during this time to help make sure all Medicare beneficiaries receive the improved care they need and deserve.

114th Congress