Medicare's New Physician Payment System
A new policy brief from Health Affairs and the Robert Wood Johnson Foundation provides a primer on the Medicare payment part of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. For more than two decades, Congress and the federal government have struggled with how to reimburse providers in the Medicare program and at the same time promote high-quality care that uses medical resources judiciously. Revising Medicare fee schedules has been a perennially thorny political ritual. While MACRA passed both houses of Congress with overwhelming bipartisan support, a request soon after the law's enactment from the Department of Health and Human Services (HHS) for information on how the law should be implemented yielded hundreds of comments from most major stakeholders, signaling both areas of agreement and of tension.
Topics covered by this policy brief include:
- What's the background? As the brief notes, since Medicare's inception in 1965, physicians have worked to assure that they would be paid the same fees that they received from private insurers. Also, since the program's early years, Congress has constantly been investigating whether providers have been improperly billing the government on behalf of Medicare patients. The brief relays the history of congressional efforts to rein in costs, including the 1997 creation, and 2015 demise, of the Medicare Sustainable Growth Rate (SGR). In the past decade, the brief notes, congressional action, including the passage of the Affordable Care Act (ACA), has focused on improving the quality of care and promoting transparency and accountability as well as payment reform.
- What's in the law and what's the debate? The brief describes the formula MACRA will use to give physicians fee increases and it illustrates its implementation timeline. It explains how physicians will need to enroll in the Merit-Based Incentive Payment System (MIPS) or join an alternative payment model. The debate section details a variety of comments offered by key stakeholders in response to HHS's request for information on MACRA's implementation.
- What's next? As the brief concludes, three years of complex rulemaking lie ahead amid a still-entrenched fee-for-service system, continued rancor over the ACA, and changes in both the administration and Congress. How well MACRA succeeds in improving quality, reducing unnecessary care, and lowering costs growth remains to be determined.
About Health Policy Briefs
Health Policy Briefs are aimed at policy makers, congressional staffers, and others needing short, jargon-free explanations of health policy basics. The briefs, which are reviewed by experts in the field, include competing arguments on policy proposals and the relevant research supporting each perspective.
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About Health Affairs
Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print and online, with additional Web First papers and health policy briefs published regularly at www.healthaffairs.org. Read daily perspectives on Health Affairs Blog and customize the content you want to see in Health Affairs Alerts.
About the Robert Wood Johnson Foundation
For more than 40 years the Robert Wood Johnson Foundation has worked to improve health and health care. We are striving to build a national Culture of Health that will enable all to live longer, healthier lives now and for generations to come. For more information, visit www.rwjf.org. Follow the Foundation on Twitter at www.rwjf.org/twitter or on Facebook at www.rwjf.org/facebook.