Bigger than Obamacare: another health care game changer will soon take effect
In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA). The law has largely flown under the radar of most people, but it ultimately may be just as big of a health care game changer as the Affordable Care Act (ACA). It promises to be as transformative for doctors and other health care providers as the ACA has been for insurers.
In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA). The law has largely flown under the radar of most people, but it ultimately may be just as big of a health care game changer as the Affordable Care Act (ACA). It promises to be as transformative for doctors and other health care providers as the ACA has been for insurers.
MACRA — which is expected to create disruptive innovation for the entire U.S. health care delivery system — is a complicated and challenging law. Because of its direct impact on the largest federal health care program — Medicare — MACRA will affect the way that almost every physician in America is paid, as it accelerates a transition from traditional fee-for-service reimbursement toward payment based on the value of services.
The law does this in three ways:
It replaces the Medicare sustainable growth rate (SGR) that cut payment increases to doctors when the volume of services provided by members of their specialty exceeded certain growth targets. These cuts were delayed every year since the late 1990s, so that if implemented, the total of all the delayed cuts would have significantly lowered the incomes of many physicians. Critics warned that this would have led a large number of them to refuse to accept Medicare;
It consolidates multiple quality reporting programs for the Centers for Medicare and Medicaid Services (CMS) into a single pay-for-performance program called the Merit-based Incentive Program (MIPS), which will begin in 2019. The new program requires reporting on six measures, instead of nine, and gives clinicians reporting options to accommodate differences in specialties and practices;
It encourages physicians to participate in new payment and delivery models known as Alternative Payment Models (APMs) that pay incentives for taking on certain performance and financial risks. This provision first becomes effective in 2019 and will determine payments starting in 2021.
While the changes established by MACRA only apply to Medicare, the impact will go beyond that program and be felt across all patients. The law specifically allows physicians to receive rewards for certain value-based programs implemented by private insurers. While this provision doesn't kick in for another two and a half years, early-adopting physicians and health systems are already beginning to reorganize their practices so they can participate.
However, many doctors are still unaware of this new program. In fact, a 2016 Deloitte survey of U.S. physicians found that 50 percent of non-pediatric physicians had never heard of MACRA, and only 32 percent recognized the name. Given the significant technical, financial, operational, and clinical investments they will need to make to successfully transition to the program, it is unlikely that many will be sufficiently prepared in four months when it takes effect. As a result, CMS is considering pushing back the January 1, 2017 implementation date.
While the political season and on-going debate surrounding the ACA has so far eclipsed this important change, the long-term strategy of moving away from fee-for-service reimbursement and toward performance-based incentive payments is a game changer. It will drive significant improvements in quality and efficiency that are needed to build a health system that is sustainable over the long term.
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