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The Basics of the Medicare Access and CHIP Reauthorization Act

As nurses continue to gain valuable work experience and aim to achieve an advanced degree – like a Master of Science in Nursing from the University of Arizona – there comes a responsibility to understand important legislation that will impact their career and financial stability. These actions include bills like the Comprehensive Addiction and Recovery Act of 2016 and the Breath of Fresh Air Act. It is crucial for these professionals to be aware of the status of these proposals as they could affect the future of the field.

Medicare Part B reimbursements are changing.

One of the newest measures put in place by Congress is the Medicare Access and CHIP Reauthorization Act (MACRA). Let’s delve into this law to study its influence on nursing:

The purpose

In an effort to reorganize how health care works in the U.S., MACRA aims to alter the way health-care professionals are paid for their service. As the field moves to a system that stresses quality over quantity, this was a crucial change.

Currently, physicians are compensated on a fee-for-service basis. Under MACRA, payments in the future will be based on the value and effectiveness of health-care providers’ services and care. Overall, the legislation encompasses three actions related to changes in Medicare disbursements, according to the American Academy of Family Physicians (AAFP):

  • Repeals the Sustainable Growth Rate (SGR) Formula, which was used to dictate Medicare payments for service provided by health-care professionals.
  • Introduces a new technique for reimbursing health care providers as a result of their offering better quality care to their patients. There are two paths to payment: the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs).
  • Combines three already existing reporting programs – Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VBPM) and Meaningful use (MU) – into one new system. It also adds another program – Clinical practice improvement activities (CPIA) – into MIPS.

A closer look at the SGR Formula

The Centers for Medicare and Medicaid Services (CMS) have used various methods over the years to attempt to control their costs. One of the longest-running tactics was the SGR formula, which was put in place in 1997 by the Clinton administration. The goal of the action was to make sure that the gross domestic product was not exceeded by the annual increase of costs by Medicare users.

The SGR formula looks at economic growth, provider efficiency and changes in enrollment to determine a target for Medicare expenses. For a period of time, physicians saw increases in their payments. Yet, the recession that took place from March through November 2001 resulted in a forced slowdown in Medicare spending. As a result, health-care professionals took a pay cut.

Determined not to repeat this situation again, Congress began to patch the system through what was called a “doc fix.” It essentially ignored the cuts the SGR formula demanded and moderately increased physician payments. This system, however, was difficult to maintain as the gap between what the equation targeted and what the government carried out widened.

The implementation effectively eliminates this formula, which once was a strong indicator of the success of the Medicare reimbursement system.

The Quality Payment Program

Replacing the SGR formula is the Quality Payment Program (QPP). This name is the umbrella term which describes the MIPS and APM tracks under MACRA. Let’s analyze these two paths.

Under the MIPS program, health-care professionals receive a composite score between zero and 100. This figure is based on the following four factors:

  • Quality.
  • Resource Use.
  • Clinical Practice Improvement.
  • Meaningful Use of Certified Electronic Health Record (EHR) Technology.

Depending on their final number, providers will receive a positive, negative or neutral adjustment to the base rate of their Medicare Part B payment. This distribution is required to be budget neutral. That means a higher reimbursement will be given to those with a stronger score, whereas those with a lower performance will earn a reduced payment. The base rate will also increase on a yearly basis, starting in 2019 and ending in 2022 when adjustment levels are expected to stabilize.

The other payment track under the QPP is the APMs program. This enables physicians and managed-care nurses to utilize another qualifying Medicare reimbursement plan such as:

  • A Medicare Shared Savings Program (MSSP) accountable care organization.
  • A payment model expanded under the Center for Medicare & Medicaid Innovation – the exception being Health Care Innovation Award recipients.
  • Medicare Health Care Quality Demonstration Programs or Medicare Acute Care Episode Demonstration Programs.
  • Another demonstration program required by federal law.

Those who participate in this program may be subject to MIPS as well, but will likely earn higher scores – meaning better reimbursement payments.

The timeline

Although MACRA was signed into law on April 16, 2015, the bipartisan legislation is undergoing a grace period before it is actually implemented in 2019. The implementation of MACRA is a multi-step process:

  • 2016-2019: Establishment of a 0.5 percent physician fee schedule update every year.
  • Jan. 2019: Physicians may enter the MIPS or APM track, depending on their qualifications and eligibility.
  • 2020-2025: Medicare physician fee schedule updates hold steady at 2019 levels.

It is important for health-care providers to get a head start on this protocol, as changes to physician payments will be based on data submitted in 2017. By planning ahead, health-care professionals can avoid any negative consequences – specifically payment adjustments – that may go into place in 2019.

As mentioned earlier, reimbursement rates will increase from 2019 through 2022. The schedule is as follows:

  • 2019: -4 percent to +4 percent base rate adjustment.
  • 2020: -5 percent to +5 percent base rate adjustment.
  • 2021: -7 percent to +7 percent base rate adjustment.
  • 2022: -9 percent to +9 percent base rate adjustment.

What this means for nurses

While much of the language related to MACRA revolves around doctors and physicians, there are other health care professionals to consider when it comes to the legislation – namely, nurse practitioners and physician’s assistants.

As stated earlier, under the MIPS program, health care providers will earn a score which factors in Meaningful Use of Certified Electronic Health Record Technology. At one time, this element only applied to physicians, but as of Jan. 1, 2017 it applies to more employees within the field. As a result, the Advancing Care Information category is now an important portion of the meaningful use section. All members of a practice, including nurse practitioners and physician’s assistants, must share a report that demonstrates how they utilize EHR technology on a daily basis and how it affects information exchange and interoperability.

The ACI figure – which makes up 25 percent of the MIPS score, under the Meaningful Use moniker – takes into account both a base number and performance rate, which can add up to a maximum of 100 points. Each element factors certain objectives into its score:


  • Protection of patient health information.
  • Electronic prescribing.
  • Patient electronic access.
  • Coordination of care through patient engagement.
  • Health information exchange.
  • Public health and clinical data registry reporting.


  • Patient electronic access.
  • Coordination of care through patient engagement.
  • Health information exchange.

Nurses will now be included in the process.

Options for participation

Practice leaders need to identify whether or not their nursing staff will be able to meet these requirements, as they can be more challenging for health-care professionals who have never been responsible for these tasks before. If the answer is “no”, facilities can use 2017 – an optional year for MACRA – as a test drive for implementing the ACI category under MIPS. There are various levels of participation practices can partake in for 2017, yet there are some drawbacks according to their decision, SA Ignite reported:

No participation ⇒ Organizations not exempt from MIPS that send in no 2017 data will face a negative four percent payment adjustment.
Submit something ⇒ Reporting only one quality, ACI or IA measure will earn enough MIPS points to avoid a penalty.
Submit a partial year ⇒ If practices submit 90 days of 2017 to Medicare, they may earn a neutral or positive payment adjustment.
Submit a full year ⇒ If practices submit a full year of 2017 to Medicare, they may earn a positive payment adjustment.
Participation in an Advanced APM ⇒ Practices that sufficiently participate through an AAPM will earn a five percent Part B bonus and are exempt from MIPS.

In the future, these rules will become mandatory and updated versions of the guidelines will continue to be released by the CMS. It’s crucial for all health-care providers to remain aware of their obligations under MACRA to avoid any negative consequences that come with noncompliance. This legislation aims to streamline Medicare Part B reimbursements for practices and the health-care providers they employ, yet it comes with multiple facets to understand.

Earning a Master of Science in Nursing from the University of Arizona opens the doors for nurses to gain better access and understanding to the benefits afforded through MACRA. By providing a higher quality of care to patients, these health-care providers may be eligible for more favorable reimbursements under the legislation.



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