Implementing MACRA

Physicians who treat Medicare beneficiaries are subject to a new law and regulations governing their payment.
A doctor talks to a patient in an examination room.

What's the Issue?

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.

What's Next?

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.

Media Contacts

Melissa Blair

Robert Wood Johnson Foundation (609) 627-5937

Additional Media Contact: Sue Ducat

Health Affairs (301) 841-9962