Person with a lot of questions

What is MACRA? Is it Going Away?

Patricia Goede

Patricia Goede

Vice President, Clinical Informatics | XIFIN, Inc.

Jul 12, 2018

Will quality reporting under MACRA change? Will it go away? Not likely.

The reason: Medicare spend was 15% of total Federal spending in 2017 with payments totaling $702 billion and a projected growth in spend at 4.6% over the next ten years. With these projections the Medicare Hospital Insurance Trust is expected to be depleted in 2026, three years earlier than the 2017 projection1. Another challenge to repeal is that Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is separate from the Patient Protection and Affordable Care Act (ACA) and even if the ACA is repealed, MACRA has combined several programs (SGR, Meaningful Use, and PQRS discussed below) that can stand alone on the road to partial capitation through quality reporting.

Although there have been several packages of legislation to reduce healthcare spending from Medicare Modernization Act of 2004, Deficit Reduction Act of 2006 and Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act 2010 to name a few, the primary drivers for quality reporting through MACRA are implemented at least through 2019. Below, Figure 1 illustrates the long history of deficit reduction and value-based measures designed to reduce Medicare spending and align expenditures with budgeted targets. For discussion purposes, we will focus on a broad timeline and three of the most significant legislative mandates that contributed to MACRA as we know it today.

History of legislation and mandates timeline

First, quality reporting is direct result of efforts to eliminate fee for service and usher in value-based reimbursement. Fee for service payment systems were based on volume of service not value and were largely becoming unsustainable to the Medicare Program. In 1997, Congress passed the Sustainable Growth Rate (SGR) formula as part of the Balanced Budget Act of 1997 (P.L. 105-33) that was designed to limit the amount of funding for Medicare based on the growth of the economy or Gross Domestic Product (GDP) 2. The point of the SGR was to control Medicare spending by determining the annual updates to the Medicare Physician Fee Schedule (MPFS) and align expenditures with the targeted budget defined in the Medicare Economic Index (MEI), essentially capping the growth of physician’s reimbursement3.

A second quality initiative aligned with value-based healthcare was the Meaningful Use program. In 2009, the Meaningful Use program was enacted to use incentives payments and penalties to encourage the use of electronic reporting of quality data with the use of electronic patient records4. Meaningful Use was, and is still is, dependent on the use of electronic reporting and through another mandate, the Health Information Technology for Economic and Clinical Health (HITECH) Act that was designed to modernize healthcare using electronic medical records. Meaningful Use Stage 3, is a component designed to achieve healthcare reform and innovation through payment incentives or penalties associated with program participation, is now part of and MACRA.

Third, enter the first of many quality reporting initiatives the first being the Physician Quality Reporting Initiative (PQRI) in 2007 a voluntary quality reporting program that provided financial incentives for certain physician’s who participated in Medicare. In 2015, PQRI shifted from voluntary reporting to the Physician Quality Reporting System (PQRS) a mandatory reporting program to which incentives ranging from 1.06% in 2013 to 0.5% in 2014 for eligible professionals. Likewise, penalties were assessed for failure to participate in reporting patient outcomes in the 2014-2015 period required hospitals and healthcare affiliates to report data on their processes and outcomes of care.

So, the question remains, is MACRA going away? Not likely.

Quality reporting is tightly coupled to value-based reimbursement, and the initiatives for pay for performance have been instantiated and evolved since 1997, it is highly unlikely quality reporting for Medicare patients will go away.

The volume of savings to the Medicare program is so substantial that regardless of politics, pay for performance and value are not going away.

Sources:

1. Cubanski, J., Ph.D, & Neuman, T., Ph.D. (2018, June 22). The Facts on Medicare Spending and Financing. Retrieved June 28, 2018, from Henry J Kaiser Family Foundation website: https://www.kff.org/medicare/issue-brief/the-facts-on-medicare-spending-and-financing/

2. NHE Fact Sheet. (2018, April 17). Retrieved July 12, 2018, from Centers for Medicare & Medicaid Services website: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html

3. Sustainable Growth Rates & Conversion Factors. (2014, November 25). Retrieved July 12, 2018, from Centers for Medicare & Medicaid Services website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SustainableGRatesConFact/index.html

4. Blumenthal D, Davis K, Guterman S. Medicare at 50 Moving Forward. N Engl J Med. 2015 Feb 12;372(7):671-7. doi: 10.1056/NEJMhpr1414856. Epub 2015 Jan 28.

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