Medicare Access and CHIP Reauthorization Act (MACRA)

The Medicare Access and CHIP Reauthorization Act of 2015 is a federal law that changed how doctors who treat Medicare patients are paid by Medicare. It’s sometimes called the “Permanent Doc Fix” as a result. It also removed Social Security numbers from Medicare cards to prevent identity theft.

What Is MACRA?

The main goal of the Medicare Access and CHIP Reauthorization Act (MACRA) has been to improve care for Medicare beneficiaries by rewarding health care practices that improve care while reducing costs.

It attempts to achieve these goals through several actions.

Highlights of MACRA
  • Repealed the Sustainable Growth Rate formula — which had determined payments to doctors prior to MACRA.
  • Created the Quality Payment Program (QPP) at the heart of rewarding health care providers for quality of care instead of volume of treatments.
  • Streamlined multiple programs under the Merit Based Incentive Payments System (MIPS) to reform payments to clinicians.
  • Gave bonus payments for participating in eligible Advanced Alternative Payment Models (APMs) to incentivize efforts to achieve MACRA goals.

MACRA and the Sustainable Growth Rate Repeal

By repealing the Sustainable Growth Rate formula and replacing it with the Quality Payment Program, MACRA is credited with stopping a potential exodus of health care providers from Medicare.

Prior to MACRA, Medicare relied on the Sustainable Growth Rate formula to determine how much to pay health care providers. The formula was supposed to control rising health care costs to Medicare.

The formula had to be adjusted each year and was becoming increasingly unpopular with doctors. It limited payments to doctors without considering the type, complexity and amount of health care provided.

The formula called for a more than 29 percent cut in payments to doctors in 2012. This led to an increasing number of doctors simply refusing to accept Medicare.

A Texas Medical Association survey in 2011 found that eight percent of doctors in that state had already stopped taking new Medicare patients. Another 22 percent planned to stop and 41 percent were considering whether or not to stop accepting new Medicare patients.

The Sustainable Growth Rate formula gave doctors incentives to schedule more visits, order more tests and perform more procedures for Medicare patients. MACRA shifted that incentive toward improving the quality of care and cutting overall costs by offering bonuses to health care providers that met that balance.

How Does the Quality Payment Program Work?

The Quality Payment Program is an incentive program at the core of the Medicare Access and CHIP Reauthorization Act. This is the mechanism that changed and simplified how Medicare pays health care providers for the care they provide.

Health care providers have two options for taking part in the Quality Payment Program: The Merit Based Incentive Payments System (MIPS) and Advanced Alternative Payment Models (APMs).

Merit Based Incentive Payments System
MIPS is a system that determines a health care provider's Medicare payment adjustment. The system uses a composite score based on the clinician’s performance to determine whether the provider receives a payment bonus, a penalty or no payment adjustment aside from what Medicare has already paid.
Advanced Alternative Payment Models
APMs provide added incentive payments for providing quality and cost-efficient care. Health care providers who take part in APMs can earn Medicare incentive payments of 5 percent for taking part in a participating innovative payment model. An Accountable Care Organization is an example of an APM.

MACRA, Your Medicare Card and Identity Theft Protection

MACRA mainly affected the payment relationship between Medicare and health care providers. People on Medicare should have noticed few if any changes aside from one: MACRA also required Medicare to remove Social Security numbers from all Medicare cards.

This move was intended to improve security for Medicare beneficiaries.

Medicare replaced all affected cards by mid-January 2019. The new cards, and every card issued since the change took effect, now use randomly generated letter and number combinations called Medicare Beneficiary Identifiers, or just Medicare numbers.

Sample image of Medicare card
MACRA ordered Medicare to replace Social Security numbers on Medicare cards with new, randomly generated Medicare numbers.

The intent of the law was to keep beneficiaries’ private health care and information along with their federal benefit and service payment information safe from identity theft.

Last Modified: August 5, 2021

9 Cited Research Articles

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