Q&A: The Medicare Access and CHIP Reauthorization Act (MACRA)

Cencora is committed to keeping our customers informed about government and legislative affairs that impact community-based specialty practices. In our previous Q&A, we explored the The Seniors’ Access to Critical Medications Act of 2023 (H.R. 5526/S. 3458) and its purpose of allowing physicians to mail medications directly or allowing beneficiaries' family members or caregivers to pick them up on their behalf. You can read that article here.

In this edition, Lisa Harrison, SVP & President, Specialty Distribution and Solutions at Cencora and Beth Mitchell, VP of U.S. Public Policy and Advocacy at Cencora discuss the Medicare Access and CHIP Reauthorization Act (MACRA) and efforts to revise the Medicare physician payment system in light of cuts in physician payments by the Centers for Medicare & Medicaid Services (CMS).

Lisa Harrison (LH):

Beth, thank you for your time. Let’s go ahead and dive into our topic for today: The Medicare Access and CHIP Reauthorization Act (MACRA). Can you provide an overview of MACRA and its impact since being enacted in 2015?

Beth Mitchell (BM):

Certainly. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is a federal law that was enacted in 2015 and caused major reform to the Medicare payment system by repealing the Sustainable Growth Rate (SGR) formula for physician reimbursement¹. This formula previously determined at what rate physicians and their practices will be reimbursed for their services under the Medicare Physician Fee Schedule (MPFS). The SGR had been used in an attempt to keep yearly increases in Medicare beneficiary expenses from exceeding the growth in the gross domestic product (GDP) - if expenditures exceeded targets, the following year’s payments would be reduced, and if expenditures were less than expected, then physician payments would increase.

This formula did not benefit physicians as intended, and in response, Congress replaced the SGR with MACRA to create a “value-based” payment system, with bipartisan support. MACRA incorporates quality measurement into payments under the associated Quality Payment Program (QPP), which has two tracks for Medicare payments: Merit Based Incentive Payment System (MIPS), and Advanced Alternative Payment Models (A-APMs). MACRA also reauthorized the Children’s Health Insurance Program (CHIP).

However, in the years following its passage, various stakeholders have expressed concerns about MACRA – such as problems with MIPS data² as well as operational deficiencies contributing to the failure of both MIPS and A-APMs to successfully reward providers for meeting performance thresholds³ in the wake of cuts to physician payments.

LH: Fair reimbursement for community-based providers and the services they provide, as well as ensuring that the reporting processes that drive those reimbursement decisions are consistent, fair, and accurate, are of paramount importance. Has there been any notable action from lawmakers in response to these concerns?

BM: Most recently, as part of a government funding package in early March, Congress voted to address the Medicare physician payment rate cut and moved to reduce the payment cut in half, meaning instead of a 3.37 percent cut, physician reimbursement was reduced by 1.69 percent.^4,5

LH: While Congress addressing the Medicare payment cut rate is a step in the right direction, we can agree that there is plenty of progress still to be made. Are we continuing to see support from lawmakers and other stakeholders in addressing issues with MACRA?

BM: This year has seen visible interest from lawmakers and other industry stakeholders. Stakeholders like the American Medical Association (AMA), which initially expressed support for the “passage of this historic legislation”⁶ in 2015, are now becoming highly vocal about their concerns regarding MACRA and physician cuts.

Additionally, in February 2024, a bipartisan group of U.S. Senators announced the formation of a Medicare payment reform working group to investigate and propose long-term modifications to physician payments and updates to MACRA⁷. This would help provide more stability and certainty for physicians and their practices, and financial capital to continue to operate their businesses and serve their patients. The Senators have acknowledged that the physician payment system has not been able to successfully keep pace with the cost of care and developments in the industry; therefore, changes to the current system must be made to enable fair reimbursement and financial stability for providers⁷.

On May 17, 2024, Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) released a white paper titled Bolstering Chronic Care through Physician Payment: Current Challenges and Policy Options in Medicare Part B, which outlines policy reform proposals for Medicare payments to physicians including creating sustainable payment updates to ensure community providers can own and operate their practices and rethinking how Medicare measures quality care⁸. However, while this white paper includes policy proposals, legislation and further congressional action would be needed to implement reforms, and congressional activity is ongoing with more expected in 2025.

There have also been other actions out of Congress looking at physician payment concerns, such as a proposed bill and request for information (RFI) issued by Senators Bill Cassidy, M.D. (R-LA) and Sheldon Whitehouse (D-RI)⁹.

LH: Those are all incredible examples of changemakers and key stakeholders coming together to raise the collective voice of community providers. Alongside these efforts, Cencora is committed to advocating for policy improvements related to physician reimbursement, and the support that we’ve received from customers and team members has been instrumental in the progress that we’ve seen so far.
Are you anticipating any more congressional action to be taken soon?

BM: Well, the recent budget request submitted by the Biden administration did not address funding to fix issues with MIPS or A-APM, nor did it request funding to continue the $500 million MIPS exceptional bonus pool that expired in 2022.

With the nation turning its collective eyes toward the upcoming U.S. presidential elections, healthcare will be an important issue in the public arena for debate, with a focus on high-profile issues such as the Affordable Care Act, the Inflation Reduction Act, reducing the pace of medical inflation, and reproductive health¹⁰. These time constraints and political environment will put issues like MACRA on the backburner within the halls of Congress through November, which has historically had difficulty passing laws during presidential election years¹¹.

The Cencora U.S. Public Policy & Advocacy team continues to provide proactive perspectives and lobby for policy improvements related to physician reimbursement. The team continues to serve as a resource for our customers, monitoring congressional and administrative activity, providing updates on the implications and progress of this policy, and sharing Cencora’s expertise on this and many health policy topics to help shape legislation to support our customers and their patients.

LH: Beth, thank you for your time today and the continued commitment from your team. It’s important for us all to stay engaged and up-to-speed on these developments as we continue advocating for equitable reimbursement. Together, leveraging our collective experiences, resources, and knowledge, we can empower positive change in the industry and create a better future for community care.