President Barack Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) into law on April 16, 2015. The law, passed by a strong bipartisan majority in both chambers of Congress, replaced a controversial existing Medicare physician payment system in effect since 1999. The new law makes fundamental changes in the government’s approach to physician payment.
The new approach is consistent with, and draws on, a shift in the private sector and government over the past decade toward value-based payment: paying providers based on the quality, value, and results of the care they deliver and not piecemeal for individual services regardless of the clinical need for or appropriateness of those services.
This shift is potentially transformational but presents serious implementation and logistical challenges. Not all doctors embrace the change, and the philosophical and economic underpinnings of value-based payment—and the mechanisms to achieve it—continue to be vigorously debated.
Congress gave the Centers for Medicare and Medicaid Services (CMS) the task of developing regulations to implement MACRA. That process has been under way since May 2015, encompassing three comment periods that yielded some 4,000 comments. The agency issued final regulations October 14, 2016. They contained significant changes from the proposed rules promulgated in April 2016.
The initial phase of the law commenced January 1, 2017. CMS now refers to the program as the “Quality Payment Program.”
The administration of President Donald Trump, as of the date of publication of this brief, had not indicated whether it plans changes to the MACRA rules now in effect. Such changes would require formal rulemaking. However, the final MACRA regulation stipulates that the program will likely require modifications as time goes on and urges an open and public approach to that process. Additionally, the new administration could seek changes in the law in Congress this year or in the future.
This policy brief focuses primarily on the context in which these changes are taking place, implementation challenges, and the debate over the law and the concepts that underlie it. This brief represents a significant update to a brief about MACRA’s core provisions published by Health Affairs in April 2016.
MACRA and the rules implementing it create a payment system for physicians that will accelerate Medicare’s transition from fee-for-service payment untethered to any accountability to payment based on performance metrics, patient experience, patient outcomes, and public health improvement.
But years of complex implementation lie ahead amid continued political debate and rancor over the fate of the ACA, structural reforms to the Medicare and Medicaid programs, and the best ways to improve care quality, reduce unnecessary and wasteful care, and control rising costs.
In the context of the history of the Medicare program, MACRA is but the latest experiment. It is a large one and will be closely monitored. Changes are inevitable, and the final rules create a formal pathway for continued stakeholder and public comment in coming years.