News & Insight

Breaking Down the Acronyms to Understand MACRA

By  John Marren and Tom Babbo. Edited by Mary Grace Babbo. 

In a political climate where government initiatives for healthcare are constantly created and revised, it can be difficult and tedious to keep the acronyms and program-specific language straight – even for the physicians whose professions and patients are affected by these new payment plans. A striking example of this phenomenon comes with the CMS’s important 2015 payment plan Medicare Access and CHIP Reauthorization Act (MACRA), which features a plethora of new and vague terminology and acronyms.

According to a 2016 survey of US healthcare executives, only half of the respondents claimed to be very familiar with MACRA’s “potential bonuses and provider payment cuts.” While physician awareness of MACRA has inevitably risen since 2016, it remains a challenge for the public to understand the specifics of the ever-evolving CMS healthcare policies. By breaking down the acronyms and terminology of MACRA, the plan becomes more accessible to the people it affects. 

So, What Exactly is MACRA? 

MACRA stands for the Medicare Access and CHIP Reauthorization Act, and replaces the Medicare sustainable growth rate (SGR) formula used to control Medicare’s spending on physician services. As a payment system, SGR, officially implemented in January 2012, set a mark for spending on Medicare with the goal of keeping the yearly increase in spending per Medicare beneficiary below the per-capita growth of gross domestic product. Yet, SGR had multiple issues, the most prominent its inability to “inhibit volume of services” despite working to “limit prices” of these services. MACRA, officially implemented in April 2015, seeks to fix the issues of SGR by rewarding quality of care over volume of care through fixed annual payment updates under the Medicare Physician Fee Schedule (PFS).

MIPs, APMs, and AAPMs: Determining the Payment 

MACRA reimburses physicians through rewarding them for higher quality care, and uses two tracks to determine payment: Merit-based Incentive Payment Systems (MIPs) and Alternative Payment Methods (APMs). MIPs, set to begin in 2019, combines three already-existing quality-reporting programs: the Physician Quality Reporting Program (PQRS), Value-Based Payment Modifier, and Medicare Electronic Health Record (EHR) Incentive Program. MIPs forms a composite performance score based on four weighted performance categories: quality, resource use, clinical practice improvement activities, and meaningful use of certified EHR technology.

Based on this MIPs composite score, qualifying physicians will receive budget neutral positive, negative, or neutral pay adjustments based on their performance up to the percentages outlined in a CMS presentation. Beginning in 2026, MIPs will provide annual payment updates of .25% to the PFS. MIPs does not apply to hospitals or facilities, only physicians. 

Physicians who participate in eligible APMs, which include the Medicare shared savings program (MSSP), the CMS Innovation Center model, and required demonstration of healthcare quality under law and the Health Care Quality Demonstration Program, receive bonus payments under MACRA. In fact, many physicians in APMs also qualify for MIPs and the CMS states such physicians “will receive favorable scoring under the MIPs clinical practice improvement category.” 

Advanced Alternative Payment Models (AAPMs), outlined on the CMS website, may qualify a physician for a 5% lump sum bonus payment from 2019-2024. Physicians in AAPMs do not qualify for MIPs. 

Payment Track Summary

  • MIPs and APMs are separate tracks to determine value-based rewards for qualifying physicians.
  • MIPs pay physicians with MIPs adjustments, determined via a composite score.
  • APMs pay physicians APM-specific rewards in addition to MIPs adjustments.
  • AAPMs are a special type of APM that unlock other rewards and a 5% bonus for qualifying physicians, but exclude that physician from MIPs adjustments.

Understanding MACRA: Why It Matters

  • Opt-out policy: The American Medical Group Association (AMGA) has recently argued that CMS’ 2018 exemption policy for practices earning more than $90,000 from Medicare patients annually is problematic. The claim is that this opt-out policy hurts the positive impact that MACRA can have on doctors in navigating the switch from a fee-for-service (FFS) system to value-based care. 
  • Benefits to the public: Patients’ quality care and experience is paramount to the success of MACRA and health systems generally. It is vital that patients are aware of changes in the health care system and how it may impact their care, and are provided with the resources and services that enable them to successfully navigate the system. 
  • Steps to overhaul a persistently problematic system: MACRA’s core changes to the FFS system also foreshadow new payment models for commercial payers. Understanding MACRA’s impact on Medicare allows customers to prepare for upcoming changes in local markets. 

How We Can Help 

Accountable Care Organizations (ACOs) can assist physicians in navigating MACRA, and may qualify as AAPMs if they meet the legal criteria. Clinically integrated networks (CINs) can also support physicians in their MACRA reporting by aligning the quality measures that are contained in MACRA in their own programs. CINs can additionally help provide infrastructure to support the physicians’ reporting, and can ensure that they receive the correct pay adjustments. MACRA is a step in the right direction towards rewarding physicians for quality over quantity: It’s important that the public and physicians benefiting from the implementation of this new model understand its key terms.



  Jun 11, 2018  |  By    |   On Health Care