MACRA 2016 Proposed Rule

V. Key Issues: Population Health >> H. Quality/Satisfaction >> General Approaches >> Pay-for-Performance  >> Medicare Access and CHIP Reauthorization Act (MACRA) >> MACRA Proposed Rule (4.27.16) (last updated 1.25.18)
Lead Editor: Dana Beezley-Smith, Ph.D.


The Future Of Medicare Physician Reimbursement: 10 Major Takeaways From The MACRA Proposed Rule. On April 27, 2016, just over a year after the Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law, the Department of Health and Human Services (HHS) unveiled its proposed rule to begin its implementation. “The 962-page notice offers important insight for health care providers into how the Center for Medicare and Medicaid Services (CMS) will link physician payments to quality care through MACRA.” (Mondaq, 5.16.16)



  • Many Existing APMs Excluded Under Proposed Physician Pay Rules. “The limited number of existing models qualifying as APMs drew concerns from several provider organizations, including Premier. ‘As we have learned through members in our Population Health Management Collaborative, these programs require providers to not only forgo revenue through a lower volume of services, but also invest millions of dollars in redesigning care through new technologies, data analytics, additional staff, etc.,’ Blair Childs, a premier spokesman, said in a written statement. ‘We think most businessmen would call that more than nominal risk, yet CMS choses to define it as only cases where there is risk to the government.’ Not including Track 1 ACOs and bundled payment programs could lead physicians to leave APMs and return to fee-for-service payment, Childs warned.” (HFMA, 4.28.16)
  • A Deep Dive on the ‘Overwhelmingly Complex’ MACRA Proposed Rule. “The 962 pages of MACRA are so overwhelmingly complex, that no mere human will be able to understand them. Above, I have only covered the HIT related concepts, which are a small subset of all the changes to payment processes. This may sound cynical, but there are probably only two rational choices for clinicians going forward – become a salaried employee delivering clinical care or become a hospital-based clinician exempted from the madness. The folks at CMS are very smart and well meaning, but it’s hard for me to imagine implementing the NPRM as written in the timeframes suggested… Maybe the upcoming presidential transition (whoever is elected) will give us time to pause and reflect on what we’ve done to ourselves. As a practicing clinician for 30 years, I can honestly say that it’s time to leave the profession if we stay on the current trajectory.” Halamka, John. (Healthcare IT News, 5.6.16)
  • Death by Regulation. “Organized medicine, having fought for the ‘reform’ that resulted in MACRA and its 962 pages of regulations, is applauding the rule’s likely positive impact on quality of care, outcomes, and efficiency, while acknowledging that small practices are likely ‘losers.’ The American College of Physicians (ACP) is urging internists to ‘be prepared’ and learn about the overwhelmingly complex rule in ‘bite-size pieces.’ Small practices are ‘not always set up to do the necessary large data analyses,’ said ACP vice president Shari Erickson. ‘One of the key things is to start to understand it. It is complex and will become more complex as we move toward implementation, but if you can start to do the items on the top 10 list that we’ve come up with—maybe not all at once, just identify a couple to start now—you can make progress.’” (American Association of Physicians and Surgeons, 5.12.16)
  • Macra: The Quiet Health-Care Takeover. “This new set of rules uses the power of Medicare to put the federal government in charge of almost every aspect of physician care in the U.S. Macra adopts the same theory of cost control embedded in ObamaCare. It assumes that the federal government has the knowledge and wherewithal to engineer better health care through ‘delivery system reforms,’ forgetting the utter failure of the bureaucracy’s previous effort. ObamaCare and now Macra use Medicare’s payment regulations to force hospitals and physicians to change how they care for their patients. The administration’s regulations will force doctors to comply with scores of new reporting requirements and intrusions into their practices. Physicians who refuse to bend will see their Medicare fees cut… The not-so-hidden agenda of the Obama administration is to use Macra and related regulations to force physicians into joining accountable-care organizations. ObamaCare nudged hospitals and physician groups to form these organizations to manage patient care. But they are an unproven concept.” Capretta, J., Chen, L. (Wall Street Journal, 5.31.16)
  • MACRA Proposed Rule Creates More Problems Than It Solves. Describes several shortcomings of the MACRA program. Subtitles include: An Open Invitation To Game The System; Rewarding Reporting Capabilities Instead Of Medical Excellence; An Unreliable Quality Score; Inadequate Feedback Loops; Undermining Patient Privacy. “While HHS had the best intentions in creating MIPS, the proposed rules are so abundant with flaws and weaknesses that it is very difficult to imagine the program could ever be successfully implemented.” Yaragh, Niam. (Health Affairs, 10.12.16)


  • Relax, It’s Only MACRA. “So the real question is, is MACRA better than what doctors currently have to put up with PQRS, Meaningful Use, and Value-Modifier programs? Yes, by combining reporting of quality data into one program instead of the three separate ones, MACRA can substantially ease the burden of reporting. Yes, because MACRA’s maximum potential penalties for failing to successfully report quality and cost data for the next four years are less than under the current reporting programs. Yes, because MACRA allows physicians to earn positive payment adjustments while the current PQRS and Meaningful Use programs only allow physicians to avoid penalties (no positive adjustments allowed). Yes, because under the current PQRS and Meaningful Use programs, Medicare keeps the money from negative adjustments to some physicians while MACRA keeps it in the physician payment pool. Yes, because MACRA allows the thousands of  physicians in certified Patient-Centered Medical Homes (or who decide to get certified) to get favorable scoring, helping them qualify for positive payment adjustments. Yes, because under MACRA, physicians in Advanced Alternative Payment Models can to earn 5% Medicare FFS bonus payments each year from 2019-24 (and more favorable updates afterwards), plus whatever payment incentives and additional revenue opportunities apply to their advanced APM.” Doherty, Bob. (American College of Physicians Blog, 5.19.16)
  • MACRA: The ACP’s Take. “The plus sides: an end to the long-derided sustainable growth rate (SGR) formula and introduction of a successor to the equally maligned meaningful use (MU) incentive program. The down sides: The proposed rule, released in April 2016 and scheduled to take effect in January 2017, is almost 1000 pages long, is difficult to digest, and includes several yet-to-be-defined provisions. The American College of Physicians (ACP), while acknowledging the complexity of these sweeping changes, lauds the new legislation as an important step forward. Medscape spoke with Shari Erickson, MPH, vice president of governmental affairs and medical practice at ACP, about the legislation and ACP’s efforts to support physicians in this transition.” (Medscape Internal Medicine, 6.15.16)

Impact on Small Practices

  • MACRA Regulations Out, Ensuring the Demise of Private Practice. “On April 27, 2016, CMS released the components of this new bill.  While it does set out to balance the budget, it does so at the expense of physician reimbursements. There are bonuses for some and negative adjustments for others. But, those hit hardest will be solo doctors and those in small practices. Over the past decade or so, our reimbursements did not increase despite soaring overhead costs.  Yet, data released by CMS suggests that solo doctors will face negative adjustments to the tune of $300 million. We simply cannot afford that… CMS apparently is extolling assembly line medicine and patients will be the biggest losers here.” (MedCity News, 4.28.16)
  • FAQ: Medicare Lays Out Plans For Changing Doctors’ Pay. “Robert Berenson, a fellow at the Urban Institute, said a key question for the law is ‘have they set it up so small practices can actually stay in business and report so they don’t have to throw in the towel and get hired by somebody because the reporting burden is too great?’… Payment increases under either system may not be generous enough to keep up with other costs, such as increases in practice expenses.” (Kaiser Health News, 4.29.16)
  • Confession of an Ex-regulator: Farzad Mostashari on How Government Should Work. “Now that he’s running his own company — on the other side of those federal regulations — Mostashari sees numerous problems with how government rulemaking works, he told POLITICO this week… As the CEO of a company working with physicians to set up accountable care organizations, Mostashari has his own lobbying priorities. In the past week, he’s argued that Medicare’s new physician payment rule would be ‘financial suicide’ for small practices. ‘I regret [saying that], a little bit,’ Mostashari said. ‘I don’t believe that there is a campaign out there to kill the small practice of medicine. But without real attention to the unintended consequences of the policies we’re doing, that’s exactly where we’re going to end up,’ he added. ‘And it’s not a good place.’” (Politico, 5.6.16)
  • The Future of Medicare Physician Reimbursement. “The cost burden of compliance, in the context of overall Medicare payment increases over the next four years that will be substantially less than the rate of inflation, may make it increasingly difficult for smaller practices to survive, and may increase the number of doctors who opt out of Medicare in some high end urban markets.” (Proskauer, 5.12.16)
  • According to Shari Erickson of the American College of Physicians (ACP) (6.15.16), a “key opportunity for smaller practices that will happen pretty much right away within the advanced APM pathway is the Comprehensive Primary Care Plus (CPC+) program, which is a new program building on the existing comprehensive primary care initiative that’s been under way within the Center for Medicare & Medicaid Innovation (CMMI) for several years. The CPC+ program is planned to start in the beginning of 2017, and it will be in 20 market areas across the country. It is expected to involve approximately 5000 practices and 20,000 clinicians. Those primary care practices, particularly those with 50 or fewer clinicians, will be part of the advanced APM pathway and will receive not only the care management fees that are included with the program, but also the 5% bonus on their fee-for-service payments. In addition, owing to feedback received from ACP and others, CMMI recently announced that primary care practices participating in the Medicare Shared Savings Program (Medicare’s accountable care organization program) can also participate in CPC+.”
  • CMS Needs to Halt the March to Health Care Gigantism.“Too many sectors of the economy are being dominated by a few big players. In American health care, this is not only the case, but has been the default preferred stance. In health care, there is an almost Darwinian belief that the evolution to bigger is better. This is why last year saw 112 hospital mergers (up 18 percent from 2014), and the percentage of physician practices owned by hospitals doubled between 2004 and 2011. Yet, there is no evidence that consolidation of hospitals and physician practices leads to better clinical outcomes or cost reductions. In fact, recent studies suggest that small, physician-owned practices have a lower average cost per patient, fewer preventable hospital admissions, and lower readmission rates than hospital-owned practices. That is why it is so unfortunate that, as part of the largest rewriting of doctor payment rules in a generation, the Centers for Medicare and Medicaid Services (CMS) unwittingly has drafted regulations that—as currently proposed—further neglect the power of physician independence and create strong incentives for further consolidation in health care… There are a few changes they could easily make to improve the program.” Mostashari, Farzad, MD. (The Hill, 7.22.16)

Center for Medicare and Medicaid Services

  • New Medicare Penalty Hits Small Groups, Solo Physicians Hardest. “Medicare’s new compensation formula will bestow performance bonuses as high as 4% on an estimated 412,000 physicians and other clinicians in 2019 and impose corresponding penalties on another 346,000, mostly in practices of from one to 24 members, according to proposed regulations released yesterday by the Centers for Medicare & Medicaid Services (CMS). One physician organization is expressing dismay about a payment system that seems to work against smaller practices. ‘It’s extremely concerning,’ said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), in an interview with Medscape Medical News. ‘Any program like this should give physicians the opportunity to succeed regardless of practice size. Why wouldn’t you structure it so it will lift all boats?’… ‘It’s inconsistent with the congressional intent, and inconsistent with what CMS has been saying, that they would make [MIPS] so much more difficult for physicians in anything but a megapractice,’ said Gilberg.”  (Medscape Medical News, 4.28.16)

  • CMS: Dire MACRA Estimate for Small Practices Not ‘Reality.’ “The Centers for Medicare and Medicaid Services (CMS) is backing off from an estimate in table form showing that most clinicians in groups of 24 or less will incur a penalty come 2019 in one track of Medicare’s new payment system. ‘I don’t think that table represents the reality,’ Acting CMS Administrator Andy Slavitt told apprehensive members of Congress in a hearing last week. Instead, small practices can prosper just as much as large ones in the new system as long as they report performance data to CMS, said Slavitt. And the agency will lend a hand to help them succeed. The orphaned estimate appeared in last month’s proposed regulations for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which replaces the sustainable growth rate formula for physician compensation.” (Medscape Medical News, 5.17.16)
  • Slavitt Details MACRA Commentators’ 5 Priority Areas. “Slavitt aimed to demonstrate at last week’s meeting how providers’ feedback is being used to ensure MACRA will not just make things better in terms of costs and patient care, but in solving some of physicians’ problems that are currently leading to burnout… He detailed how providers’ feedback falls into five priority areas for the CMS: 
    1. Impact on patients, including keeping the focus on patient care;
    2. Simplified reporting and feedback, including putting the burden on technology rather than the user to adapt to workflow;
    3. Impact on small and rural practices, including providing a level playing field by ensuring MACRA is not too ‘administratively burdensome’ and deploying technical assistance;
    4. Pathway for Advanced Alternative Payment Models, which notes that a one-size-fits-all program won’t work, necessitating multiple pathways to models that qualify for Advanced APMs that pay a 5% bonus for participation; and
    5. Physician readiness for new program, which ensures physicians are prepared for the coming changes and are ‘set up for success.’
  • The final rule is set to be released by November 1. See the CMS Blog: Remarks by Andy Slavitt before the American Osteopathic Association.” (Healthcare Dive, 7.25.16)

Delay on Penalties

Feds Announce First-Year Break on MACRA Penalties. “Responding to strong concerns from the Texas Medical Association and other physician organizations, a top federal official announced Thursday that physicians who at least try to comply with new Medicare payment rules next year will see no penalty in their 2019 payments. Under the Medicare Access and CHIP Reauthorization Act (MACRA) physicians’ 2017 performance on various quality, cost, technology use, and practice improvement measures will determine cuts or bonuses in their 2019 Medicare payments. ‘During 2017, eligible physicians and other clinicians will have multiple options for participation,’ Andy Slavitt, the acting director of the Centers for Medicare & Medicaid Services (CMS), said in an agency blog post. ‘Choosing one of these options would ensure you do not receive a negative payment adjustment in 2019.’ In response to TMA’s request for clarification, CMS spokesperson Aisling McDonough tweeted, ‘As long as you submit something for 2017, then no penalty. If you submit nothing, then you do get a penalty.’ Mr. Slavitt said details for MACRA’s first year will come when the agency releases its final MACRA rules by Nov. 1. TMA analysts cautioned that Mr. Slavitt’s comments and exactly how they will be implemented are unofficial until the final rules come out.” (Texas Medical Association, September, 2016)

Physician Surveys

  • Physicians Wary of MACRA’s Potential to Hasten the Demise of Independent Practices. “According to a May 2016 survey of 1,300 physician groups of five or less clinicians by Black Book™, 67% of high Medicare-volume doctors foresee the end of their independence due to the so-called doc fix bill or MACRA, which repeals the Medicare Part B Sustainable Growth Rate (SGR) reimbursement formula and replaces it with a new value-based reimbursement system, will not have the technology, capital or staffing to sustain under the conditions of the Merit-based Incentive Payment System (MIPS). Despite small practice education, training and technical assistance programs promised from CMS to help onboard physicians with the MACRA programs, 89% of the remaining solo practices expect to minimize Medicare volumes as to not be required to submit reports for the quality and clinical practice improvement activities or report in the cost performance category. 77% of small practices identified themselves as financially struggling currently due to physician staffing losses to larger group practices and hospital IDNs directly. 72% also blame their under-performing billing technology and compounding payment issues for their troubles.” (Black Book Market Research, 6.13.16)
  • Many Physicians Predict Mass Exodus From Medicare Over MACRA. “Almost four in 10 physicians in solo and small group practices predict an exodus from Medicare within their ranks on account of the program’s new payment plan and its punishing penalties, a Medscape Medical News survey reveals. Fifty-nine percent of physicians in practices with fewer than 25 clinicians also said they expect to receive a performance penalty as high as 4% under proposed regulations that implement the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Only 9% of physicians in under-25 groups expect a bonus, with another 12% counting on no change in compensation. Roughly one third of physicians in small practices said merger into larger groups promises to be the most likely fallout from MACRA. This pessimistic outlook was more than matched by reader comments on the survey, posted on May 5. ‘Death by bureaucratic strangulation, one emergency medicine physician wrote.” (Medscape Medical News, 6.30.16)
  • Deloitte Survey Finds Low Physician Awareness and Many Needed Changes by Physicians for Medicare’s MACRA Program. “A transformative law is on track to fundamentally change how physicians and other clinicians are reimbursed under the Medicare Physician Fee Schedule (PFS), but half of recently surveyed physicians have never heard of it, according to the ‘Deloitte Center for Health Solutions 2016 Survey of U.S. Physicians.’… Additionally, more self-employed physicians and those surveyed in independently-owned medical practices (21 percent) – as compared to surveyed physicians employed by hospitals, health systems, or medical groups owned by them (9 percent) – report that they are somewhat familiar with the law. The survey also found that physicians with a high share of Medicare payments are just as unaware of MACRA as others… Many physicians surveyed (58 percent) said they would opt to be part of a larger organization to diminish individual physician risk and/or to have access to a full spectrum of resources and capabilities. Additionally, 80 percent of physicians surveyed expect MACRA to drive physicians to join larger organizations or networks.” (Deloitte, 7.13.16)
  • More Doctors To Retire As MACRA And Value-Based Pay Hit. “The nation’s doctors, facing a tsunami of changes in how they are paid, plan to retire in droves as value-based pay replaces fee-for-service medicine and they are forced to implement more new regulations, according to a new report. The biennial survey from the Physicians Foundation shows 46% of physicians plan to ‘accelerate’ their retirements, cut back on patients or seek ‘non-clinical roles,’ according to the group’s survey, which is conducted by physician staffing and recruitment firm MerrittHawkins. More than 17,000 physicians are polled, Merritt said. Not all of these doctors will leave medicine right away, with 14.4 % of physicians saying they will retire in the next one to three years compared to 9.4% in 2014. Meanwhile, 21% say they will cut back on hours and another 13.5% say they will seek a ‘non-clinical’ job in healthcare. Doctors are being dogged by ‘poor morale’ and ‘invasive regulations,’ according to the survey… ‘Many physicians are dissatisfied with the current state of the medical practice environment and they are opting out of traditional patient care roles,’ said Dr. Walker Ray, president of the Physicians Foundation.” Japsen, Bruce. (Forbes, 9.21.16)