Pulse check: MACRA three years in

Value-based care and interoperability are key concepts in today’s healthcare industry, but what do they look like in practice? How can they be implemented in a way that works for both the practice and the patient? Paying for value rather than volume is seen as a way to improve care for patients and reduce healthcare costs. The aim of a value-focused reimbursement system is to align physician, payer and patient goals, in that practitioners are paid for delivering cost-effective, quality-driven care, and not simply for delivering more care.

Like interoperability, the aim of value-based care is laudable, but achieving this aim may seem like a pipe dream. Moreover, it’s easy to talk about these concepts on a high level as goals to achieve, but as medical group practice leaders know too well, the devil is in the details. If not implemented correctly, the shift toward value may have the opposite effects: higher costs, increased physician burden and less physician attention on their patients.

Medicare’s role in value-based payment

As the largest purchaser of healthcare in the United States, the Centers for Medicare & Medicaid Services (CMS) is in a position to promote the movement to value-based care delivery and payment reform. Recognizing this opportunity, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) to encourage the development of and participation in alternative payment models (APMs).

Congress created incentives for qualifying participants in APMs such as exemption from the one-size-fits-all reporting program, the Merit-based Incentive Payment System (MIPS); a 5% lump sum bonus on Part B claims until 2024 and a higher annual update under the Physician Fee Schedule (PFS) starting in 2026. These incentives are in addition to any benefits inherit in the APM itself, which might include opportunity to enjoy in any savings generated for the payer, payments for high-value services not currently covered by Medicare and other flexibilities in care delivery.

MACRA set forth very basic requirements for innovative payment models to qualify as an APM under the statute: qualifying APMs must use quality measures similar to MIPS, require use of certified EHR technology and assume more than nominal financial risk. When CMS promulgated regulations under MACRA, it began calling the two payment tracks, MIPS and APMs, the “Quality Payment Program.” CMS also finalized a very stringent definition of financial risk, creating a high bar for models to qualify for this second payment track under MACRA. CMS refers to these models as advanced APMs.

There is no single approach to APMs that will work for all practices or specialties, which is why multiple, voluntary models are needed so that providers can test new designs for care and payment delivery. APMs can be structured in many ways, but generally require a mechanism for measuring performance of participants, as well as performance-based financial rewards or penalties.

The key players

The Center for Medicare & Medicaid Innovation (CMMI) tests innovative payment demonstrations in Medicare. CMMI may expand the duration or scope of models it is testing or piloting if the program is certified by the CMS Office of the Actuary as reducing Medicare spending without reducing the quality of care or improving the quality of care without increasing Medicare spending.

The Physician-Focused Payment Model Technical Advisory Committee (PTAC) was established by MACRA as a bottom-up approach to APM development; it created an avenue for stakeholders and the private sector to bring forward physician-created proposals for new payment models. The committee consists of 11 members who evaluate applications for new models and make recommendations to the Department of Health and Human Services (HHS) on whether to test or implement models through CMMI. While PTAC may recommend new APMs for adoption, CMMI is the only entity authorized and funded to test or expand new APMs, including those that meet the definition of an advanced APM.

PTAC has received dozens of proposals for new physician-focused payment models, at least 14 of which were recommended favorably to CMMI for testing or full implementation. However, as of February 2019, CMS has not yet implemented any PTAC-recommended models through CMMI. In the 2019 PFS, CMS expressed “it seems unlikely” the agency will fully adopt any PTAC-recommended models this year, which has caused growing frustration within PTAC itself and the stakeholder community over a perceived cold shoulder to very viable options for facilitating APM growth.

With PTAC seemingly on the bench for now, CMMI has continued its top-down approach to APM development and is modeling demonstrations on its own. In February 2019, CMS announced a new payment innovation idea, “Emergency Triage, Treat and Transport,” (ET3), a model for ambulance suppliers and providers.

Rather than always transferring a patient to an emergency department, ET3 would provide payment for alternative interventions: Ambulance providers could transport a patient to an alternative location, such as an urgent care clinic or physician’s office, or furnish telehealth services in the ambulance. So far it is unclear how participants will determine where to transport a patient if not to the emergency department. This could become disruptive for medical practices if patients with an acute medical problem arrive via ambulance without an appointment. CMS has also declined to release details on the telehealth element of the model and whether distant site providers can be reimbursed for services if the beneficiary is not located in a rural area or if other statutory requirements for Medicare telehealth services are not met.

Advanced APMs

Because only advanced APMs qualify for incentives under MACRA, development of models under this standard is desirable. Unfortunately, as of February 2019, the Trump Administration has only announced one new model that qualifies: BPCI-Advanced, which is a refined version of previous iterations of this bundled payment model. 

Three years into MACRA, there remain a very limited number of advanced APMs. In the current market, there simply aren’t enough APMs to accommodate clinicians in different practice sizes, specialties and geographic areas. Table 1 shows that the number of models that qualify as an advanced APM has increased only slightly since the first program year in 2017, and the number of qualifying participants in an advanced APM could even decrease in 2019, according to predictions made by CMS.



MGMA has offered suggestions to expedite the process for providers to participate in advanced APMs and believes the most important steps are:

1. More appropriately define qualifying risk
2. More effectively leverage and support APM development by private payers and recommended by PTAC
3. Expediently develop a wide range of diverse APM options that vary in structure, design and approach.

HHS Secretary Alex Azar’s statements support mandatory participation in APMs as a way to expedite participation in value-based payment models, but MGMA does not agree that forcing group practices into untested APMs is an appropriate answer. Based on an MGMA Stat poll in March 2018, 72% of medical group practices opposed government-mandated participation, citing lack of evidence, diversity among medical practices and the negative impact on practice innovation. MGMA will continue to urge CMS to implement voluntary models as expediently as possible so that more clinicians and group practices have an opportunity to qualify as participants in advanced APMs and benefit from program incentives.

MGMA Government Affairs staff encourage members who have questions to contact us at 202.293.3450 or govaff@mgma.org.