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December 12, 2016

Part Three: The Broader Impact of MACRA


In part three of our MACRA series, we look at the broader implications of this rule on the healthcare world. We are especially interested in following what changes may occur with Republican control of both the White House and Congress.

Predictions: MACRA may be modified, but not scrapped

The election of President-elect Trump has many on the healthcare world wondering if there will be significant changes to MACRA. Much of the discussion has centered around the Affordable Care Act, but there is evidence that MACRA will not be repealed, although it could see some modifications. There is great speculation for the moment and we will keep you posted as developments continue.

As pointed out in Healthcare Finance, much of the conversation about MACRA changes centers around the Center for Medicare and Medicaid Innovation (CMMI). Although this was created as a part of the Affordable Care Act, it plays a significant role in the development of alternative payment models. Some analysts indicate that Congress may want to assert more control over CMMI and not provide it with as much authority to make payment changes. The biggest criticism of CMMI is that changes it make are not subjected to congressional approval. However, CMMI does give an administration tools to change payment and control spending without such approval, so there may be value in keeping CMMI.

The Healthcare Finance article suggests MACRA fits into a bipartisan reform landscape in general, since it repealed the sustainable growth rate and moved physicians towards performance-based payment, which has support on both sides of the aisle.

However, there are three major point the industry should focus on in the coming months. First is the scope of authority Congress wants to have over payment reform, something that could forecast whether CMMI survives. That is important for MACRA as the Center develops many of the programs that count as APMs within MACRA.

Second, the new Congress' view of ACOs in general will be telling. Third, it will crucial to see how much emphasis Congress places on performance-based penalties and bonuses. Will Congress look to achieve performance based payment by increasing the penalties and bonuses for quality performance?

On a related note, in a statement, the American Academy of Family Physicians said they do not believe MACRA as a whole is in any real danger of repeal.

Did CMS go too far in the final rule?

Despite bipartisan, bicameral support in Congress and backing from the much of the medical community, there were some questions raised by stakeholders after the release of the final rule. Earlier this year, Slavitt said the government needed to win back the "hearts and minds" of doctors soured on meaningful use and other reporting requirements. The new, slower ramp-up of MACRA reflects CMS’ effort to extend Medicare transformation beyond 2017, making economic reform a long-term program.

To some, this is a welcome pace, but it has been reported by other outlets that it, as Joe Antos of the American Enterprise Institute noted, “could be an opportunity; this could be a disaster … It’s hard to know.” Concerns were raised about MACRA turning into another failed program like the flawed Sustainable Growth Rate (SGR) that the law repeals, or similar to meaningful use and the PQRS/Value modifier programs.

Katherine Baicker, a professor of health economics in Harvard T.H. Chan School of Public Health's Department of Health Policy and Management, said that it was too soon to know if CMS' went too far in providing flexibility. "It could be a big step in the right direction, or it could be the next [Sustainable Growth Rate]," she said. The regulation also perpetuates Medicare's problems in quality programs by not providing timely feedback so doctors can pivot more quickly on problem areas, although CMS intends to try and shorten the feedback timeline. Right now, performance in 2017 is ultimately penalized or rewarded in 2019. It will be challenging without an astute eye to data metrics to understand best and worst practices  that result in rewards and penalties over a 2 year gap.

Will Congress intervene?

Upon release of the rule, Senate Finance Committee Chairman Orrin Hatch (R-Utah) issued the following statement, calling the final rule “an important step”:

“This Congress, Washington acted on what many thought was impossible and put meaningful and bipartisan Medicare reforms back on the books. Replacing the dysfunctional cycle of near annual patches for Medicare’s Sustainable Growth Rate (SGR) with an improved payment system rooted in smart policies that were debated and vetted by the Finance Committee has given beneficiaries peace of mind that they will have access to the care they need and deserve.

“Today’s rule marks another critical milestone in the implementation of this historic law. It demonstrates CMS’s continued commitment to working with American health care providers and reflects the shared goal of allowing doctors and medical centers to shift to the new payment system by participating in the reforms at their own pace, helping to lay the groundwork for a successful transition in 2017.

“While the rule must be carefully studied and examined in its entirety, this is an important step forward in the process. I hope CMS will continue to maintain a robust dialogue with Congress, Medicare beneficiaries, and the health care community as a whole to ensure the proper implementation of this critical program.”

This tepid, but supportive statement did not stop the GOP doctors caucus from dissenting, as reported by Medical Economics. The article notes:

The 18-member GOP Doctors Caucus is reviewing the final rule. “If the final rule is not satisfactory, the Doctors Caucus will look at a possible legislative fix. Our top priority is getting this right for patients and practitioners,” Rep. Phil Roe, MD, tells Medical Economics. A co-chair of the caucus, Roe represents Tennessee’s first district.

In response, CMS Acting Administrator Andy Slavitt told Medical Economics the agency worked closely with the Republican group and other physicians in crafting the final rule. “I’ll leave legislating to Congress because that’s what they do,” Slavitt says. “If I was a physician, I wouldn’t sit back and think, ‘Maybe there will be legislation to change things,’ however.”

Rep. John Fleming, MD, of Louisiana’s Fourth District, the caucus’s other co-chair, says MACRA and its reporting requirements are likely to frustrate doctors who would prefer to spend their time caring for patients rather than reporting on quality measures. If the final rule is too onerous for physicians to meet requirements, especially through the law’s Merit-based Incentive Payment System (MIPS) where most small practices will fall in 2017, Fleming is concerned many physicians may opt for direct-pay practice models and eliminate Medicare patients from their panels.

Both Roe and Fleming voted for MACRA because it replaced the never implemented and universally unpopular sustainable growth rate formula. But when CMS wrote the proposed rules to implement MACRA, those writing the rules made the law more complex, Fleming says. 

That complexity is likely to cause physicians to stop accepting Medicare patients, he told Medical Economics. “The bottom line is you have more and more doctors saying, ‘We can’t even figure out this rule,’” says Fleming, a primary care physician running for the U.S. Senate this year. “For my employees, it just seems like we have to do more and get paid less.”

MIPS may force physicians to spend less time with patients, he says, because they would need to devote so much effort to monitoring and reporting their performance in order to achieve MIPS’ quality goals. Even small physician groups of 10 or fewer would need to expend limited resources to monitor their performance on more than 20 measures, he added.

Are the MACRA regulations legal?

Lou Kartsonis is an ophthalmologist in San Diego, also writing in Medical Economics, goes one step further. Speaking for many physicians unhappy with the premises that underpin the MACRA law, he questions the legality of the effort. Specifically:

“In the transition from fee-for-service to pay-for-performance, one question that has not been asked is whether MACRA is legal. The Medicare law was passed in 1965 with the stipulation that government would not interfere with the practice of medicine.” The relevant clause, titled “Prohibition Against Any Federal Interference,” reads as follows:

Section 1801. Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.

“MACRA, with all of its distractions and fool’s errands, not only interferes with the way we practice, but threatens our compensation if we don’t get with the program,” he writes.

“This is a flagrant violation of the Medicare law. So why isn’t the medical establishment challenging the legality of this morass? If this were any other constituency—lawyers, cops, teachers, labor unions—a challenge would be filed in federal court and their lobbyists would be knocking doors down all over Capitol Hill.”

Industry response

Collecting an array of industry feedback, the consensus is a mostly positive response to the CMS final rule.

American Medical Association

The American Medical Association issued the following statement:

“The AMA acknowledges the commitment by Acting Administrator Andrew Slavitt and his senior team at CMS for listening to physician concerns and taking several concrete steps to help them adjust to this new Medicare payment framework,” said AMA President Andrew W. Gurman, MD. “By announcing the ‘Pick Your Pace’ approach to give physicians greater flexibility and increased options for participating in MACRA in 2017, HHS Secretary Burwell and Acting Administrator Slavitt took a significant step last month to address AMA concerns about the original proposal. The final rule includes additional steps to help small and rural practices by raising the low volume threshold exemption, and practices of all sizes will benefit from reduced MIPS reporting requirements.

“Our initial review indicates that CMS has been responsive to many of the concerns raised by the AMA, and in the days ahead, the AMA will conduct a comprehensive review of the final rule to ensure that it promotes flexibility and innovation in the delivery of care to help meet the unique needs of all patients. With the flawed Sustainable Growth Rate (SGR) formula – and its annual threat of steep payment cuts – permanently eliminated, the new law gives many physicians the opportunity to be rewarded for the improvements they make to their practices and for delivering high-quality, high-value care to Medicare patients.”

The American Academy of Family Physicians

“The final rule addresses many of the concerns family physicians have expressed about the complexity of the program, the pace of implementation, new administrative burdens and the usability of technology," AAFP President John Meigs, M.D., of Centreville, Ala., said in a statement.

"In particular, we are pleased that practices with low volumes of Medicare Part B patients are excluded in the first year and that family physicians will be able to move toward full participation without suffering penalties that will slow their progress," he added.

Burwell asserted that implementation of the Quality Payment Program would "strengthen our health care system for patients, clinicians and the American taxpayer."

CMS Acting Administrator Andy Slavitt pointed to the rule's built-in flexibility aimed at allowing physicians to work at their own pace.

"Today's policies are designed to get all eligible clinicians to participate in the program so they are set up for successful care delivery as the program matures," he said in the HHS news release.

American Hospital Association

Tom Nickels, executive vice president for Government Relations and Public Policy for the American Hospital Association, released the following statement:

“Today's final Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) rule presents challenges and opportunities for hospitals and health systems, and the nearly 540,000 directly employed or contracted physicians with whom they partner to deliver quality care.

“While we are disappointed that CMS continues to narrowly define advanced alternative payment models (APMs), which means that less than 10 percent of clinicians will be rewarded for their care transformation efforts, we are encouraged that CMS is exploring a new option that would expand the available advanced APMs that qualify for incentives. We urge CMS to ensure that this option be available in 2017 and look forward to working with them so this new model achieves an appropriate balance between risk and reward.

“We are pleased that CMS has provided clinicians with increased flexibility to meet MACRA's aggressive timelines and reporting requirements. By allowing them to "pick their pace," clinicians in a variety of settings will be able to more easily transition to the new program. Furthermore, CMS's final measures for the advancing care information category of the Merit-based Incentive Payment System (MIPS) offer some welcome relief from the overly aggressive initial proposal.

“At the same time, the AHA remains concerned that the lack of sociodemographic adjustment to the measures used in the MIPS will unfairly disadvantage clinicians and hospitals caring for the poorest patients. Opportunities also remain to further align hospital and clinician performance measurement, and we will work with the agency to make that happen.

“We continue to review the details of the final rule and will provide guidance to hospitals and their clinician partners. As implementation moves forward, we remain committed to making sure patients benefit from the transformation of care envisioned by MACRA.”

As reported by HealthData Management, several other groups issued statements:

Medical Group Management Association

“MGMA is pleased with the significant burden reduction for physician practices in the first year of the MIPs program and new alternative payment model options outlined in the final rule. It’s disappointing that flexibility provided for quality reporting in 2017 largely disappears in 2018 and beyond. The Centers for Medicare and Medicaid Services missed an opportunity to close the two-year gap between the measurement and payment periods, which would facilitate improved patient care by providing actionable feedback to physicians and more timely incentives. The sheer magnitude of a 2,400-page regulation and its impact on physician practices can’t be ignored.”

American Medical Informatics Association

“CMS has crafted a set of policies that are strategic, flexible and reflective of feedback from the informatics community. AMIA recommended that CMS provide physicians with an on-ramp to participation in 2017 and they have responded with a strategy that will do just that. Beginning with a much-needed ‘transition year’ for participation and inclusive of an across-the-board reduction in scope, this final rule with comment period will ensure that success is within reach of every eligible clinician.”


“Members of the Premier alliance strongly support the potential of the Quality Payment Program under the Centers for Medicare & Medicaid Services (CMS) Medicare Access and CHIP Reauthorization Act (MACRA) to help fix the misaligned incentives in Medicare’s traditional fee-for-service program. Premier is an ardent supporter of a transition away from fee-for-service and toward a model where providers are accountable and rewarded for high-quality, cost-effective care. CMS wisely allowed a gradual transition to this pay for performance reality, striking a good balance overall.

“While we are pleased that CMS eased the policy defining the Advanced APM to allow additional programs to qualify and has signaled it will increase the number of available models, the nominal risk standard remains way too high. As we have learned from members in our Bundled Payment and Population Health Management Collaboratives, these models require significant investment in redesigning care through new technologies, data analytics, and additional staff. CMS has chosen to ignore these realities. We call on CMS to rethink this risk standard in future rules to incent greater participation. We also call on CMS to accelerate recognition of ‘virtual’ physician groups that would allow small practices to band together using technology to meet the minimum thresholds and comply with reporting requirements.

“CMS did the right thing by creating an accelerated timeline for determining whether clinicians meet the standards for the Advanced Alternative Payment Model (Advanced APM) before the end of the Merit-based Incentive Payment System (MIPS) performance period. This mitigates the uncertainty and added administrative work for ACOs and other organizations who otherwise would have reported through MIPS in the absence of certainty about whether they met the Advanced APM thresholds.”


“While we are still reviewing the 2,400-page rule, the Centers for Medicare and Medicaid Services today seemed to take important steps in giving physicians much-needed flexibility for adopting health information technology as they transition to a new payment model. For instance, the final rule reduces the reporting burden on clinicians by giving them the option of a 90-day reporting period, or a full year. It also reduces the number of measures upon which clinicians must report.

“Unfortunately, CMS appears to have retained stringent language requiring hospitals and clinicians to attest that they are not engaging in information blocking. The agency does, however, clarify that providers ‘should not be held responsible for adherence to health IT certification standards or other technical details of health IT implementation that are beyond their expertise or control.’

“Meanwhile, the Office of the National Coordinator for Health IT today finalized a rule covering certification and oversight of certified health information technology. CHIME appreciates that steps that the agency is taking to increase transparency of health IT performance. Hospitals and clinicians must have confidence that the products they purchase work as intended and do not pose a significant risk to patient safety or public health.”


This MACRA final rule is the start of a long journey in Medicare fee-for service payment reform, brought about by rare bipartisan Congressional compromise legislation based on the common understanding that for Medicare to achieve long-term sustainability, volume-based incentives need to be replaced with rewards for quality and patient-centered care. To come in future years are more rigorous targets, including scoring for cost performance with CMS providing clinical feedback to clinicians on their reported performance. We especially note the importance of MACRA for manufacturers, as APMs and MIPS will increasingly influence care patterns in favor of treatments that improve downstream clinical, financial and patient-reported outcomes. Industry can help physicians understand the programs, their options and how their products fit into the value equation.

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