Study estimates how MACRA will affect Medicare spending

A new study published in Health Affairs estimates that the Medicare Access and CHIP Reauthorization Act (MACRA) could reduce Medicare spending by up to $106 billion for physician services and by up to $250 billion for hospital services through 2030. MACRA was signed into law in April 2015 and created the Quality Payment Program. Under the program, eligible professionals can choose from two payment tracks:

  • The Merit-based Incentive Payment System (MIPS), through which you earn a payment adjustment based on evidence-based and practice-specific quality data
  • Advanced Alternative Payment Models (APMs), which let practices earn more for taking on some risk related to their patients’ outcomes

The authors noted that physician payment rate increases are projected to be well below the rate of inflation for practice costs as measured by the Medicare Economic Index. According to the study, starting in 2025, physician payment rates in both the Advanced APM and MIPS tracks “fall below the pre-MACRA baseline, although they are higher for APM participants than for MIPS participants.” They concluded that MACRA could be successful if APMs are appropriately designed and implemented and if providers, including individual physicians, redesign their business models around value.

MACRA sets base payment rates under the Medicare Physician Fee Schedule, and clinicians can then earn bonuses or receive penalties on top of those base rates. MACRA increases payment rates under the fee schedule by 0.5% annually between 2015 and 2019. From 2019 through 2024, base payment rates will freeze, but exceptional performers may be eligible for an additional positive payment adjustment. In 2025 rates increase by 0.75% annually for Advanced APM participants and by 0.25% for MIPS participants.

2017 is a “transition” year, giving providers several options on how they can comply with MACRA’s requirements in order to avoid a negative payment adjustment in 2019. Providers can begin collecting performance data anytime between Jan. 1, 2017, and Oct. 2, 2017. Participating providers must submit all data, regardless of when collection began, to CMS by March 31, 2018. In addition, CMS also announced that providers who see less than 100 Medicare Part B patients in a given year or bill less than $30,000 to Medicare Part B in a given year are exempt from this quality payment program.

Learn more about payment reform and view a MACRA webinar on the Evolve Sleep website.

2017-04-15T00:00:00+00:00 April 15th, 2017|Clinical Resources|