The MACRA Final Rule: What People Need to Know

A couple of years ago, the federal government overhauled the healthcare system in the United States. While some people may be thinking about the Affordable Care Act, also known as “Obamacare”, this is actually in reference to MACRA, or the Medicare Access and CHIP Reauthorization Act. What this act did is do away with the hated sustainable growth rate formula (SGR), which pushed physicians to refuse to see Medicare patients due to its complexity and low reimbursement rate. With MACRA, the Medicare system has been overhauled, including compensation for the services that physicians provide. Recently, the government issued the MACRA Final Rule, or an executive document containing the most pertinent information from this piece of healthcare legislation. For people who don’t have the time to go through the document in its entirety, some of the most important points are contained below.

Who Does the MACRA Final Rule Apply To?

The first question on everyone’s mind is whether or not this piece of legislation affects them on a personal level. For those who are wondering, the MACRA Final Rule only impacts patients who are on Medicare and the physicians who accept Medicare as a form of health insurance in their office. This legislation does not impact Medicaid patients or physicians who see Medicaid patients in any way or patients that are on private insurance or cash-paying for healthcare visits.

When Will the Payment Schedule Change?

Physicians and patients may be wondering how the law will impact the cost of healthcare and the reimbursement rates for physicians down the road. MACRA incorporates a significant number of healthcare quality measures that could result in performance bonuses or performance penalties. Most physicians understand that the payment schedule will not change until 2019; however, the Center for Medicare and Medicaid Services (CMS) is going to start collecting data from physician practice performance in 2017. This information will be used to determine the payment schedule and reimbursement rates for services starting in 2019.

How Will the Quality of Patient Care be Judged?

What many patients and physicians are wondering is how exactly the quality of care will be measured? While patients and physicians may prefer to be judged on the quality of their care instead of simply a fee-for-service model, it is important for patients and physicians to understand what the government will be assessing when they say that the quality of patient care will matter. The MACRA Final Rule is going to examine the performance of physicians with regards to the quality of their patient care in a few different categories. There will be an Advancing Care Information category (known as meaningful use in the prior model), Clinical Practice Improvement, Cost and Resource Use, and Quality of Patient Outcomes. These separate categories will be weighted differently; however, they will all have a significant impact on the reimbursement rates for physicians who see patients on Medicare. This will push physicians to focus on the quality of their patient outcomes, and how they got there, instead of focusing solely on the number of patients that they see.

What Exactly is the Clinical Practice Improvement Category?

The MACRA Final Rule incentivizes physicians to invest time in improving the performance of their clinic in a variety of areas. MACRA provides a list of activities that physicians can engage in to improve their clinic and the clinic will receive points for each activity completed. If they hit a certain number of points, they will receive a bonus. Examples of activities that physicians can choose from include, improved patient engagement, improved patient access, improved patient safety, emergency preparedness, and a focus on achieving health equity. Completing these activities should improve the experience of patients in the clinic and improve patients’ access to quality healthcare. Practices that complete enough activities will receive a payment bonus.

Can MACRA Fix Healthcare Accounting Problems?

Everyone seemed happy to go along with this because the healthcare staff seemed to get paid, all the necessary supplies were being purchased and the doors were staying open.  But this is far from being truly accounting savvy. In just about any other business, whether large or small, executives and decision makers knew where just about every penny was being spent and where waste needed to be cut.  In the healthcare industry, no one has been paying attention and we all know that the government doesn’t work on efficiencies or the need to meet them.

There have been enough people in the healthcare community that have taken a look at the current health care system and costs involved and have felt that continuing down this path will not lead to controlled health care costs, a better healthcare system or better outcomes for patients.  As such, they began searching for a set of standards and practices that would eliminate the guesswork, promote transparency and ultimately lead to efficient and effective healthcare treatments.

Activity-based accounting has been used in other industries with great success.  The tradeoff, though, is that it is not a simplistic accounting system, but is an in-depth analytical instrument that takes a tally of things like workforce, costs for individual departments, return on investments, supplies and other purchases.  What this means is that every penny is tracked, and correlated with how it is spent. This is far different than the 30,000-foot perspective, which guesstimated what it cost to treat each patient with their specific needs. 

It begs the question: can MACRA help fix these issues or is it just adding more workload to the clinicians with no real results in the horizon? One can only wait to see what happens.