As a result, on Tuesday, March 24, 2015, the House introduced a new bill, H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which was ultimately passed by an overwhelming bipartisan majority (392 Ayes and 37 Nays) on March 26, 2015. H.R. 2 incorporated all of the legislative language found in H.R. 1470, as well as the additional policy provisions agreed to by then Speaker Boehner and Minority Leader Pelosi. The Senate also passed the legislation with a large bipartisan majority (92 Ayes to 8 nays) on April 14, 2015. President Obama ultimately signed H.R. 2 into law on April 16, 2015.
Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models
In general, H.R. 2 sought to advance a long-standing policy goal for Congress, specifically curbing Medicare spending through the creation of incentives for physicians to abandon the current volume-driven fee-for-service system in favor of value based, coordinated care models. To achieve this important objective, Section 101 of the legislation, entitled Repealing the Sustainable Growth Rate and Improving Medicare Payment for Physicians’ Services, eliminates this antiquated formula and provides physicians with an annual 0.5 percent update starting in July 2015 through 2019. In addition, starting in 2019, this section of the bill creates the Merit-Based Incentive Payment System (MIPS), essentially a modified fee-for-service program that allows physicians to earn incentive payments should they perform well on a variety of quality metrics and clinical improvement activities. For physicians who elect to participate in the MIPS program, the 2019 base payment rates will be frozen through 2025.
Starting in 2019, the MIPS program also streamlines and consolidates the existing Physician Quality Reporting System (PQRS), Value-Based Purchasing Model, and Electronic Health Record “Meaningful Use” policies, along with newly created clinical practice improvement activities into one larger reimbursement program. The statutorily mandated penalties associated with these quality measurement programs are scheduled to be eliminated, however, the extent to which physicians successfully meet all of the requirements outlined in these previously separate programs is now captured in a new “composite score.” How much physicians are paid now depends on their composite score in comparison to a performance threshold. As expected, low composite scores in comparison to the quality threshold are anticipated to result in physicians receiving financial penalties while high composite scores will result in additional incentive payments. The incentives and penalties are capped at 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022 and beyond.
To achieve the goal of driving expansion of value based, coordinated care, Section 101 of the legislation also stipulates that physicians who participate in an Alternative Payment Model (APM) are exempt from the MIPS program and eligible for 5 percent annual bonuses between 2019 and 2024. APMs are loosely defined as practice models which include two-sided financial risk and a quality measurement component. To be eligible for the bonuses, participating physicians are also required to derive a significant portion of their revenue from an APM. The revenue threshold gradually increases over the 10-year budget window for the policy. It’s the intention of Congress for concepts such as Accountable Care Organizations (ACOs) and other innovative care models to meet the definition of accepted APMs.
Information on the CMS issued regulations to implement MACRA can be found here. Below is an overview of the other key policy sections of H.R. 2:
Section 102, Priorities and Funding for Measure Development
Section 103, Encouraging Care Management for Individuals with Chronic Care Needs
Section 104, Empowering Beneficiary Choices through Continued Access to Information on Physicians’ Services
Section 105, Expanding Availability of Medicare Data
Section 106, Reducing Administrative Burden and Other Provisions