What is MACRA? And How Does It Relate to Medicare’s Promise?

Have you heard the new acronym, MACRA? The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) passed with bipartisan support in April 2015 and it will fundamentally change the way our country evaluates and pays for healthcare. The law does many things, but most importantly it establishes new ways to pay physicians for caring for Medicare beneficiaries. (See the Centers for Medicare and Medicaid Services press release and the Network for Regional Healthcare Improvement article, What is MACRA?)

At a recent MACRA conference in Washington D.C., Andy Slavitt, CMS Acting Administrator shares his words about MACRA, the important successes of Medicare, of the Affordable Care Act, and how building upon these foundations sets the trajectory for the “next evolution of our health care system”. Did you know that before Medicare, 1 in 3 elders lived in poverty?! Now that number has decreased to 1 in 10 and will continue decreasing with the support of essential programs such as Medicare and the ACA.

Please take a few moments to read Andy’s words, reviewing some of the highlights of the good accomplished and how CMS aims to learn from mistakes and build upon this success to pave the road forward.


I want to talk about the next evolution for our health care system. 

For nearly two years, I have had the incredible honor to serve at CMS and to oversee the Medicare, Medicaid, and Marketplace programs, which together provide health coverage to one in three Americans and likely pays for the majority of care that occurs in most health care communities across the nation.

There’s an old joke at CMS that if you find yourself in a tense conversation, you can usually diffuse it by saying, “Well, my mom is a Medicare beneficiary.” Inevitably, the other person will say, “Mine too.” And, from that shared sense of responsibility, you can go forward from the right place – one that is focused on figuring out what’s right for the beneficiaries we serve.

That is because Medicare is a uniquely American promise. One that – for more than a half-century – has said to all Americans that as you get older, or if you have a disability, you will be able to access care, and your family won’t go broke in the process. Before Medicare, do you know how many seniors in this country lived in poverty? One in three…. One in three. Today, it’s less than one in ten. Our promise to the millions of Americans –our neighbors — particularly when we are living on a low or fixed income– is part of what has made us who we are.

Medicare is what provides your parents’ health care and if we do our jobs right, one day, your children’s. Think of it. How we make decisions today will allow us and our children to one day put that Medicare card in our wallets to keep us secure.

So how are we doing to advance Medicare to keep its promise?

Since the passage of the ACA, over the last 8 years, together, we have made significant progress in cost and quality and in evolving to meet the new shape of health care. 

  •  Today, 30% of fee-for-service Medicare payments flow through alternative payment models, up from essentially none in 2010. And, millions more are covered through innovative Medicare Advantage programs.
  •  Quality and safety have improved with the rate of hospital-acquired conditions declining by 17%, which has prevented an estimated 87,000 deaths over 4 years. The rate at which Medicare patients are readmitted to the hospital within 30 days after discharge has decreased sharply, resulting in 565,000 fewer total readmissions.
  •  Medicare provides more access with new prescription benefits and, thanks to the Affordable Care Act (ACA), we’ve closed the Medicare donut hole and with that, 11 million beneficiaries have saved an average of more than $2,000.
  •  The CMS Innovation Center, which the ACA created, takes best practices from the clinical field and has developed over 30 alternative payment models and initiatives, serving millions of Medicare beneficiaries. The CBO expects the Innovation Center to reduce federal spending by about $34 billion over the next 10 years as we find new and better ways to care of people.
  •  And, with all of this, we have been spending tax payer resources more wisely with extended record low medical inflation. The ACA extended the life of the Medicare trust fund and has helped deliver $473 billion in savings.

Of course, there has been enormous progress extending beyond Medicare: 

  •  20 million people now have health insurance who didn’t have it before the ACA (and I am sure you understand that affordable coverage for every American helps keep Medicare costs low. A 62-year old who has affordable coverage and can manage or prevent a chronic disease will be much healthier and less costly when they enter Medicare three years later.)

You have heard the 20 million stat before. But the effects are much more profound in the everyday life and health of people.

  •  Since the ACA went into effect in 2014, more people now have a personal physician (increase of 3.5%) and easy access to medicine (increase of 2.4%).
  •  Just yesterday, the CDC reported that families struggling to pay medical bills dropped from about 21% in 2011 to 16% in the first half of 2016.
  •  There have been substantial decreases in the share of people who are unable to afford care (decrease of 5.5%) reporting fair or poor health (decrease of 3.4%).
  •  The Medicaid coverage expansion has improved the financial security of the newly insured (for example, by reducing the amount of debt sent to a collection agency by an estimated $600 to $1000 per person gaining Medicaid coverage).
  •  States that expanded Medicaid also saw their hospitals reduce debt by about 13%; 10% more than in states that didn’t expand Medicaid. As former Arizona Governor Jan Brewer said, “I don’t know how you could deliver that population any more services better, more cheaply, than what we’ve already done here,” when asked about her state’s Medicaid expansion.

If you don’t think this progress has made a major difference in the day-to-day lives of all Americans, you have been paying more attention to politics than people. In fact, there hasn’t been a greater stretch of progress in our nation’s history as measured by the amount of positive change that has impacted people and their lives and our path to a sustainable future as in the last 8 years.

But this progress should only be the start if we are to fulfill the real promise of caring for people in our country and doing it in a way that reduces the overall burden of the health care system.

Today, taxpayers spend over $500 billion each year for the Medicare program. The question that needs to be addressed head on is how Medicare will continue to control costs in the face of a demographic boom as over 10,000 Americans enter Medicare each day, rising demand for health care’s new cures and technologies; and an epidemic of chronic disease.

This is an important way to understand the context behind MACRA.

To build on the foundation we have begun on reforming the delivery system so that value based care can reach every community in America. Given this magnitude of change, I asked the team to approach MACRA differently. After this historic legislation passed, the CMS team was eager to get to work on implementation. But they heard something different from me. Stop writing, get out of DC, and start listening. 

Through 4,000 formal comments, nearly 100,000 attendees at our events across the nation, focus groups, design sessions, workshops, physician office visits (and countless tweets), we got to hear patients and clinician points of view on things we can do to make healthcare better for them.

  •  We heard the deep dedication that both patients and clinicians have to the Medicare program, but also the many frustrations.
  •  We heard from clinicians who challenged us to prove that MACRA and the Quality Payment Program wasn’t one more check-the-box program and instead allows them to focus on care and quality improvement
  •  We heard from physicians who are fed up that their EHRs do not support patient care. Clinicians want technology that make their jobs easier, match their workflows, and give them access to needed data.
  •  We heard patients who were tired of lugging around or repeating their treatment history — who wanted more time with a physician who knows them personally, so that they can get the right treatment at the right time without unneeded repetition or miscommunications.

Our challenge isn’t about accountability or quality or costs or whatever euphemism people use. It’s to recognize that the path forward isn’t through any one model or new three-letter acronym or quick fix, but by addressing the basic things, which lead to bad outcomes, physician burnout, or for patients, particularly needier ones, to feel displaced and not get the right care.

Your opportunity with MACRA isn’t to implement a new scorekeeping system. If we do that, we will not only miss the opportunity to transform, but we will add complexity to an already overly complex system.

Based on what we heard, we made major changes to how we approached this program holistically.

First, we focused on a lighter touch and less regulation. By adopting the idea that if we simplified and reduced what was measured and gave physicians back more time with patients and instead supported their quality efforts, we would make more progress. And, we reduced the number of requirements in half to help level the playing field for small or independent practices.

Second, we came to realize MACRA is many clinicians’ first experience with reporting and paying for quality for the first time. We created multiple timelines to allow clinicians to pick their own pace of entry and development.

Third, we also recognize that many practices are advanced and ready to go further, so we built more opportunities for clinicians and to allow more innovative models to flourish. We estimate that about 25% of eligible Medicare clinicians will be in an Advanced Alternative Payment Models by 2018, and we have a goal of creating options for physicians in all specialties and geographies in order to allow them to pick models that are right for them.

As we move forward, we all need to keep building on what works while systematically demanding improvement where we can do better. 

So how do I suggest we tackle the next opportunities? 

One. Build from a foundation of progress, not head backwards. There can be no delivery system reform without building on the foundation of reaching universal coverage. That means building on the record 20 million people who have newly found coverage and continuing the security and protections Americans have found, including no-cost preventive care, the elimination of lifetime and annual coverage limits, and the end of pre-existing condition exclusions. If we want to fix how care is delivered, so that we’re providing value, then we must ensure that Americans can afford and access quality care at every point in their lives. If we lose even some of the coverage gains made under the ACA, or leave people in limbo, people will lose access to regular care and we will drive up long-term costs. This doesn’t mean we shouldn’t improve how coverage works in a bipartisan fashion. We must always do that and we should now as new leaders bring new approaches and solicit new ideas.

Two. Insist that modernization of Medicare must actually mean modernization. Progress is achieved by ingenuity, innovation, teamwork, and the use of data and technology, not by changing funding formulas.  

I’ll say this bluntly: MACRA can’t work as well without a CMS Innovation Center that can move quickly to develop and expand new approaches to paying for care. With changes to the Innovation Center, the advanced alternative payment approaches could slow significantly. We will have a much narrower path with fewer specialty options and approaches, which take in patient and physician feedback. Medicare and commercial payers would then fall further out of alignment, and more importantly, less patients would have access to innovative care methods.

Three. Start to demand technology that can exchange data, that supports care, and that is affordable. MACRA is an opportunity to move the focus away from paperwork and reporting and towards paying for what works. For a variety of reasons, EHRs became an industry before they became a useful tool. The technology community must be held accountable by their customers and make room for new innovators and to give clinicians more freedom and more flexibility to focus on their patients, to practice medicine, and deliver better care. We worked alongside physicians to design technology tools (QPP.cms.gov) and a support center that allows physicians to learn about, access, and even design their involvement in the Quality Payment Program.

Four. Don’t forget that people are the heart of every policy made. We are on a journey as a nation towards better health for all. Patients. Care givers. Consumers. You know them better than anyone because you care for them. View MACRA as a step in the journey to develop care together.

With 50 days to go, I want to close by thanking everyone who has provided the often tough but critical feedback that has helped CMS do our jobs better — and that have helped me by sharing the realities of what really matters. The CMS team is committed to being your partner, to being transparent, to leading and delivering a path to better care. Remind us that your mother, and any mother are at the center of every decision we make, and we will be too.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.