business of pediatrics

MACRA Essentials: What You Need To Know Now

You've probably heard the word MACRA by now, but do you know what it means for your practice? The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was passed in April of 2015. The goal of this legislation according to the CMS, is to "reward better care, not just more care." The new vision is one where improved care and wiser spending lead to healthier people. As the healthcare system begins the journey away from fee-for-service (FFS) care and toward value-based care (VBC), MACRA is poised to play a major role in the process. Although not affecting pediatricians at this time, it is relevant to know that funding for CHIP (which covers 8M children and pregnant women) is extended through 2017. Why is this important? Prior to MACRA, CHIP funding was not available after 2015. MACRA is not set to go into effect until 2019, but the first reporting year it will take into account is 2017. With only 6 months to go, it is important to start preparing now.

MACRA is Medicare's attempt to focus on quality of care instead of volume of care, with the goal being that 85% of all Medicare payments will be tied to the value of care received.  Participating physicians will be paid according to how they rate on reported measures, with payments adjusted higher or lower according to an individual's score. Reporting on clinical measures may sound familiar to those participating in programs such as Meaningful Use, the Value-Based Modifier Program, The Physician Quality Reporting System (PQRS), and Patient-Centered Medical Home (PCMH) recognition.

There are two tracks for physicians to choose from when they participate in MACRA. The first is the Merit-Based Incentive Payment System (MIPS). The second is Alternative Payment Models (APMs). Most practices will begin by reporting through the MIPS program, and from there some may transition to the APMs.

The MIPS Track

In general, Medicare payments will increase by 0.5 percent each year from now through 2019. After that, the payment rates will level off and the MIPS Track is set to initiate bonus payments to qualifying physicians. An article from states,

"MIPS will consolidate existing value-based payment models: Physician Quality Reporting System (PQRS), Value Based Modifier (VBM) and Meaningful Use of Electronic Health Records (EHR MU). Separate payment implications associated with each program shall sunset at the end of 2018."

Physicians who take part in MIPS will be given a total score of 0-100 based on how well they meet the requirements of the program. The overall score will determine the payment adjustments, with amounts increasing or decreasing between 4% and 9%.

The MACRA program is slated to be budget neutral, which means that the total negative and positive payment adjustments must be equal. For example, if more physicians are penalized than rewarded, the physicians who are rewarded stand to receive a much higher positive payment adjustment. An article from Modern Medicine Network states,

"This budget neutrality adjustment, also referred to as the scaling factor, may be up to three times the base payment adjustment. Effectively, if in 2019 there are three times as many minus 4% scores as there are plus 4% scores, those providers that score plus 4% could potentially earn a total of plus 12%. This would keep the program budget neutral."

The 4 categories providers on the MIPS Track will be evaluated on are:

  1. Quality of Care: this will replace the PQRS reporting on quality measures.
  2. Resource Use: this will replace the Value Modifier program
  3. Clinical Practice Improvement Activities: this is similar to PCMH, where practices can choose from 1-90 improvement activities, with 1 being the minimum and extra points given for each additional activity included. If a practice is already recognized as a PCMH, they will receive full credit for this category.
  4. Meaningful Use of an EHR a.k.a. Advancing Care Information

Between 2019-2021, these categories will vary in how much weight they have in determining the overall score. The AAFP's MIPS Primer details these fluctuations:

MIPS Category                          2019                                    2020                                    2021





Resource Utilization




Meaningful Use of EHR




Clinical Practice Improvements




Meaningful Use measures and Clinical Practice Improvement Activities hold steady in their weight over the years, while Quality measures decline in importance and Resource Utilization increases.

The APMs Track

The second route for MACRA participation is called the Alternative Payment Models (APMs) Track. According to CMS, examples of providers who are currently part of alternative payment models would be those in Accountable Care Organizations (ACOs) or Patient Centered Medical Homes. However, not all providers who are currently members of APMs will be eligible for the APMs Track with MACRA. For example, those who don't qualify can still take part in the MIPS track, and the fact that they are part of an APM will increase their MIPS score in the Clinical Practice Improvement Activities category. Those who do qualify for this track will be considered Advanced APMs and deemed Qualifying Participants (QPs). Their participation in the APMs Track will allow them to be exempt from MIPS reporting. Participation in the APMs Track leads to a lump-sum bonus payment rather than percentage-based increase per year. According to an article from,

"QPs will be eligible for APM-specific rewards, a lump-sum bonus payment for the period 2019-2024 of 5 percent, and, from 2026 on, a higher fee schedule. In order to be a QP, physicians must base payments on quality measures that will be similar to those in MIPS, must use an approved EHR, and either bear more than the nominal financial risk for losses or be an expanded medical home model."

Costs Associated with MACRA

As the costs associated with meeting MACRA's requirements can be high in terms of time and resources, small practices are more at risk for negative payment adjustments. A Medical Economics article says, "CMS estimates that 87% of the nation’s solo practices (nearly 103,000 physicians) will face a penalty in 2019, the first year of the program, to the tune of $300 million." Larger group practices stand to have an advantage in receiving increased payments, due to a larger pool of revenue available to meet requirements.

To even the playing field, the U.S. Department of Health and Human Services (HHS), recently announced its plan to aid small practices in getting the help they need to effectively participate in MACRA. HHS announced $20 million per year over the next 5 years in funding for organizations that will consult with small practices at no cost to the providers in order to help them prepare for MACRA. As detailed in the HHS announcement,

"Organizations receiving the funding would support small practices by helping them think through what they need to be successful under the Quality Payment Program, such as what quality measures and/or electronic health record (EHR) may be appropriate for their practices’ needs. Organizations would also train clinicians about the new clinical practice improvement activities and how these new activities could fit into their practices’ workflow, or help practices evaluate their options for joining an Alternative Payment Model."

Final Considerations

As noted in Medical Economics, MACRA will only apply to physicians and not to hospitals. Also, providers who bill $10,000 or less in Medicare charges will be exempt for now. For example, if you are in a practice that sees a low volume of Medicare patients, such as a pediatrician's office, you will be exempt from MACRA. Additionally, if you are in your first year of Medicare participation, you will also be exempt. However, this should not deter you from informing and preparing yourself. As we have seen before, Medicare often leads the way for private payers to follow suit, and we could potentially see these regulations affecting physicians across all disciplines.

Even if you are exempt from MACRA now, you may not be in the future. This is the time to start working toward meeting the new requirements.

Additional Resources for Learning About MACRA

Centers for Medicare & Medicaid Services

American Medical Association

American Academy of Family Physicians (AAFP)

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Courtney Edelson

For several years, Courtney Edelson was the Marketing Content Manager at PCC. She wrote for the PCC Blog, and created additional content to keep pediatricians up to date on important healthcare industry news and trends. In addition to being a lifelong writer, Courtney brought nearly a decade of healthcare practice management experience to her work.