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The Whats and Hows of MACRA- a Guide to Understand MACRA Basics

Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 is unquestionably one of the most significant health care regulations proposed so far. Clearly understanding its key points is essential – these have been distilled into a simple and easy to follow format here

So what’s MACRA?
Acronym for Medicare Access and CHIP Reauthorization Act of 2015, MACRA is the Medicare payment reform that has been designed with a view of improving care quality while lowering health care cost and enhancing health outcomes. It helps create an exhaustive value-based payment model by combining various quality-based measures in one single system. Including several unprecedented changes, MACRA introduces an entirely new payment framework that is expected to impact almost all providers.

What is the Present Status of MACRA?
Having been enacted during the year 2015, this reform has allowed a public comment period of April 2016 to June 2016. 2019 has been fixed as the beginning date for the new payment model while 2017 will act as the performance year that would determine the payment adjustments of 2019. Providers have started taking action to face the changes.

What’s new about this reform?
Repealing Sustainable Growth Rate (SGR) formula, a method that was based on obsolete assumptions, MACRA is the new distribution of effective payments. It presents providers with two options to select from, namely, Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APM).

MIPS will be the default track; it has reduced incentives and is supposedly the lesser attractive choice. The Center for Medicare and Medicaid Services (CMS) predicts 89% of initial participation in MIPS and 11% in APMs. However, APM tracks have been designed with a view of encouraging increased participation in the APM track.

MIPS and APM Functionality

Working of MIPS track
Providers who select MIPS track will be awarded a combined score of performance based on four classifications as given below:
a. Quality of outcomes (50%): Including familiar clinical measures of quality such as Physician Quality Reporting System (PQRS)
b. Outcome cost (10%): Measured entirely on claim basis, this requires no reporting at all
c. Clinical Practice Improvement Activity (15%): Focusing on nine areas, this is a new category; each activity with an ‘all or nothing’ scale of scoring
d. Advancing Care Information / Use of Health IT (25%): With three kinds of scoring, this happens to be a complex category
Scores from these four categories will be converted into reward or penalty. The penalty/reward bar moves each year according to the national performance of those who participate. As the program is budget neutral, incentive reduces with the number of participants doing well.

Working of APM track
Choosing the APM track implies agreeing to take higher risk as well as higher potential reward. It is a grouping of certain payment models which offers financial benefits for accomplishing quality, shares assumed risk, and involves information sharing across varied care locations.

How to get prepared for MACRA?
MACRA has unique impacts with each provider. You first need to understand the newly proposed rule, the ways in which it is going to affect you, and act accordingly. There are webinars available that will explain the programs in detail.

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