Medicare Access and CHIP Reauthorization Act of 2015

Great Seal of the United States (obverse)

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is a significant legislation in the United States that reformed the payment system for healthcare providers under Medicare and extended funding for the Children's Health Insurance Program (CHIP). Enacted on April 16, 2015, MACRA replaced the Sustainable Growth Rate (SGR) formula, which previously determined Medicare payments for healthcare providers, with a new approach aimed at promoting quality care over quantity.

Background

Before MACRA, the Sustainable Growth Rate (SGR) formula was used to control spending by Medicare on physician services. However, the SGR formula often led to scheduled cuts in physician payments, which Congress routinely delayed through temporary "doc fixes." This approach created uncertainty in the healthcare market and was widely criticized for not adequately rewarding the quality and efficiency of healthcare services.

Provisions of MACRA

MACRA introduced several key changes to Medicare's payment system:

• Merit-Based Incentive Payment System (MIPS): MIPS consolidates three existing Medicare quality programs: the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VBPM), and the Medicare Electronic Health Record (EHR) incentive program. It adjusts payments to providers based on their performance in four categories: quality, cost, improvement activities, and advancing care information.

• Advanced Alternative Payment Models (APMs): MACRA also encourages participation in APMs, such as Accountable Care Organizations (ACOs), Patient-Centered Medical Homes, and bundled payment models. Providers who successfully participate in qualifying APMs are exempt from MIPS reporting requirements and eligible for a 5% Medicare Part B incentive payment.

• CHIP Funding Extension: The act provided additional funding for the Children's Health Insurance Program (CHIP), ensuring continued health coverage for millions of children from low-income families.

Impact

The implementation of MACRA has had a profound impact on the healthcare industry, shifting the focus from volume-based to value-based care. It aims to improve healthcare outcomes by incentivizing providers to offer higher quality, more efficient care. However, the transition has also posed challenges, particularly for smaller practices that may lack the resources to invest in the necessary technology and processes to meet MIPS criteria or participate in APMs.

Future Directions

As healthcare continues to evolve, adjustments and updates to MACRA and its components are anticipated. Ongoing efforts to refine quality measures, address challenges in APM participation, and support providers in the transition to value-based care are critical for the continued success of MACRA's objectives.