Understanding Value-based Reimbursement Models and Trends in Orthopaedic Health Policy: An Introduction to the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015

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In 2015, the US Congress passed legislation entitled the Medicare Access and CHIP [Children’s Health Insurance Program] Reauthorization Act (MACRA), which led to the formation of two reimbursement paradigms: the merit-based incentive payment system (MIPS) and alternative payment models (APMs). The MACRA effectively repealed the Centers for Medicare and Medicaid Services (CMS) sustainable growth rate (SGR) formula while combining several CMS quality-reporting programs. As such, MACRA represents an unparalleled acceleration toward reimbursement models that recognize value rather than volume. The first pathway, MIPS, consolidates several Medicare quality-reporting programs into one composite score that will be derived by four performance categories, including quality (30%), resource utilization (30%), meaningful use (25%), and clinical practice improvement activities (15%). The APM pathway includes the following programs: Medicare accountable care organizations as part of the Medicare Shared Savings Program, Bundled Payments for Care Improvement, and Comprehensive Primary Care initiative. Existing APMs have yet to be determined as eligible. We provide a contextual framework of the healthcare legislation that has led to the formation of current health policy and offer recommendations regarding SGR how orthopaedic surgeons may best steer through such reimbursement models.

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