Medicare Payment Reform: Making Sense of MACRA


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Value-based payment will bring big changes to practices. Here's what we know now.

Fam Pract Manag. 2016 Mar-Apr;23(2):12-15.

Author disclosure: no relevant financial affiliations disclosed.

Congress passed game-changing, bipartisan legislation in April 2015 that significantly alters how the federal government pays physicians to deliver health care. The Medicare Access and Children's Health Insurance Program Reauthorization Act of 2015 (MACRA) repealed the flawed sustainable growth rate formula that annually threatened health care administrators, physicians, and other providers with Medicare reimbursement cuts of up to 21 percent.1

The legislation also established two new tracks for physician payment, the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Model (APM). The U.S. Department of Health & Human Services (HHS) is counting on MACRA to transform physician payment when it is implemented in 2019 and accelerate movement toward value-based payment in the meantime. HHS has goals to move 30 percent of Medicare payments into alternative payment models by 2016 and 50 percent by the end of 2018.

MACRA lays out a basic framework for payment reform but lacks definitions for many key concepts. The Centers for Medicare & Medicaid Services (CMS) is writing regulations to fill in the blanks. A public comment period last fall preceded the planned release of a proposed rule this spring and a final rule later this year. While the fine print of these programs is still unknown, it is possible to discern the big picture for each.

Merit-Based Incentive Payment System track

Physicians who are not practicing in some type of APM will by default be on the MIPS track. Some will qualify for an exception by failing to meet the MIPS' “low volume threshold,” which is an as-yet undefined minimum number of patients, services, or allowable charges for a performance period, or by being in their first year of Medicare participation.

Beginning in 2019, MIPS will consolidate the Value-Based Payment Modifier (VBPM), Physician Quality Reporting System (PQRS), and Meaningful Use (MU) programs into a single new program, which will also include a new category of performance measures referred to as “Clinical Practice Improvement Activities” (CPIA). A MIPS composite score will be based on physicians' performance in these four areas. The score will dictate annual payment adjustments. (See “MIPS breakdown.”) The law says CPIA, which will receive further definition in rule-making, will measure such things as access, patient engagement, population health management, care coordination, and patient safety. Interestingly, “certified” patient-centered medical homes (PCMHs) will receive all points for the CPIA category. This is the only time in the law where the term “certified” PCMH is specifically used, although the term has not yet been defined.


A physician's MIPS composite score, which determines future payment adjus

About the Author

Dr. Mullins is medical director of quality improvement for the American Academy of Family Physicians.

Author disclosure: no relevant financial affiliations disclosed.



1. Fontenot K, Brandt C, McClellan MB. A primer on Medicare physician payment reform and the SGR. The Brookings Institute website. Feb. 2, 2015. Accessed Dec. 7, 2015.


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