Medicare physician payment reform after two years: Examining MACRA implementation and the road ahead

A doctor examines a patient, while other doctors look on
Editor's note:

The following is a testimony delivered by Matthew Fiedler to the Senate Committee on Finance on May 8, 2019. More information about the hearing and full video of the testimony can be found here.

Chairman Grassley, Ranking Member Wyden, members of the Finance Committee, thank you for the opportunity to testify today. My name is Matthew Fiedler, and I am a Fellow with the USC-Brookings Schaeffer Initiative for Health Policy, where my research focuses on a range of topics in health care economics and health care policy, including provider payment policy. Previously, I served as Chief Economist on the staff of the Council of Economic Advisers, where I provided economic advice on a range of health care policy issues. This testimony reflects my personal views and should not be attributed to the staff, officers, or trustees of the Brookings Institution.

I am honored to have the opportunity to speak with you about implementation of the Medicare physician payment provisions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).[1] My testimony makes four main points:

  1. Research examining the structure of the Merit-Based Incentive Payment System (MIPS) and experience with similar programs suggest that MIPS is unlikely to improve the quality or efficiency of patient care. But MIPS is creating substantial administrative costs.
  2. MACRA’s bonus payments for clinicians participating in advanced alternative payment models (APMs) have great potential to increase participation in these models, which recent research has shown can reduce health care spending while maintaining or improving quality. Consistent with this potential, implementation of the bonus has coincided with—and likely helped cause—greater participation in advanced APMs, while also encouraging the Centers for Medicare and Medicaid Services (CMS) to deploy more effective APMs.
  3. Policymakers should build on what is working in MACRA and discard what is not by increasing the size of MACRA’s incentives for participation in advanced APMs, creating similar incentives for other categories of providers, and eliminating MIPS.
  4. In the absence of broader changes to MACRA, several narrower reforms are worth considering. These include making the advanced APM bonus permanent, eliminating the “cliff” in the advanced APM bonus eligibility rules, standardizing the measures used in the MIPS quality category, and replacing the MIPS practice improvement and promoting interoperability categories with more targeted incentives…Read the full testimony