Goodbye SGR, Hello MACRA

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How will CMS’s new physician payment policy impact emergency physicians?

For nearly twenty years the debate in Washington surrounding physician payment policy revolved around the SGR, or the Sustainable Growth Rate. That all changed last year when Congress passed the Medicare Access and CHIP Reauthorization Act, commonly referred to as “MACRA” in and around the beltway. Many refer to MACRA as the “SGR-fix,” but in reality the legislation has much broader implications. It will not only change reimbursement rates but the entire payment formula and incentives for virtually every physician in the US.

The SGR was created as part of the Balanced Budget Act of 1997 to control the costs of Medicare payments at a time when physicians advocated for fee-for-service payments to keep up with inflation. In the subsequent years, however, healthcare costs outpaced inflation every year requiring physicians to lobby Congress every single year to authorize additional funds to avert payment cuts. The gap in payment grew to over $170 billion as the compounded costs of healthcare inflation accumulated. Millions of dollars and thousands of hours were spent on this physician payment policy version of Groundhog’s Day each year—we marched on Capitol Hill, Congress passed a legislative Band-Aid referred to as the “doc fix,” and hollow promises were made to fix the system.


Exit SGR, Enter MACRA
In exchange for the SGR, we have MACRA. And this is the way it will work. Until 2019, all physician payments increase by 0.5% per year, and then rates will remain constant till 2025 when the 0.5% increase starts again. That part is simple—the complexity lies in the rest of the over encyclopedia-length bill and recent 900-page regulation that details how the law will shift in physician payments at a dizzying speed. The goal of MACRA is to drive physicians towards the triple aim of better care, smarter spending and healthier people by several key provisions. Along with SGR repeal, it aims to streamline previous quality and payment programs into one, and most importantly, create bonus incentives for physicians to transition from traditional fee-for-service payment in the Medicare program into Advanced Alternative Payment Models (APMs). Given the tendency of both private insurers as well as state Medicaid agencies to follow the Centers for Medicare and Medicaid Services (CMS), it is likely that MACRA-like models will increasingly cover patients outside the Medicare program. In fact, CMS and the private payer community have acknowledged this explicit goal to reduce physician confusion and burden by developing common metrics and common payment incentives [3].

MACRA and You (The Emergency Physician)
What will the new payment system look like for emergency physicians? Much remains to be sorted out in the coming years, but several aspects are clear and written into law. Physicians payments will follow the new Merit-based Incentive Payment System (MIPS), which replaces three previous physician payment programs into one that ties a bonus or penalty each year to physician performance on 4 key areas of clinical transformation: quality, cost efficiency, use of electronic health records and practice improvement activities (Figure 1 below). Unlike the Physician Quality Reporting System (PQRS) program that over 60% of emergency physicians participated in last year—MIPS is mandatory for nearly all physicians and raises the stakes from 1–2% of payments per year to a +/- 9% payment adjustment by 2022. Unlike older programs, the MIPS allows eligible clinicians (emergency physicians or advanced practice providers such as PA and APRNS) to report as an individual or as a group (defined by Tax Identification Number [TIN]), thereby enabling quality measures to better match the team-based care models in emergency medicine.



So how will CMS measure performance? A MIPS Composite Performance Score (CPS) will be calculated based on 4 categories:

Quality (50% of CPS in 2019): The MIPS takes previous quality reporting activities of physicians and raises the bar. In the recent Proposed Rule CMS requires physicians to report quality on six quality measures that best reflect their individual or group’s practice. Because six measures specific to traditional hospital-based emergency care are not readily available, many emergency clinicians are likely to turn to CMS Qualified Clinical Data Registries (QCDR) like the ACEP Clinical Emergency Data Registry (CEDR) that automatically extracts data from most electronic health records (EHRs) on topics including sepsis, imaging appropriateness, and ED throughput. A comprehensive list of measures captured by CEDR can be found at Currently, emergency physicians selecting to use a QCDR can choose which six of the over 40 specific measures available in CEDR.

Advancing Care Information (25% of CPS in 2019): This category is based on six objectives for physicians that move away from the Electronic Health Record Adoption incentives of the previous Meaningful Use (MU) Program towards requirements to support information sharing and “interoperability” of EHRs. Unlike the previous MU program, in which emergency physicians were exempt from participation as hospital-based providers, the requirements of these office-based EHR expectations to hospital-based clinicians such as emergency physicians remain murky. However, given the widespread adoption of EHRs in EDs and the central role of the ED in acute care transitions, you can be sure that emergency clinicians are likely to be expected to participate in several aspects such as healthcare information exchange and electronic prescription monitoring and prescribing.

Cost and Resource Use (10% of CPS in 2019): What role the ED plays in healthcare costs continues to be hotly debated—however, cost measurement of emergency physicians in the MIPS is certain. CMS has currently proposed to calculate these measures for each physician and to benchmark each physician or physician group against others in the same specialty. The exact measure for emergency physicians has not yet been specified, but is likely to mirror the risk adjustment of the Overall Total Per Capita Cost Measure developed for primary care physicians and attribute “cost” to emergency physicians based on the use of episode groupers that allot various payments over the 30-day course of a condition such as pneumonia, to various physicians and facilities. Given the limited variation in professional fees for emergency services, most emergency clinicians are likely to play a larger role in the scores of other outpatient and inpatient providers for whom cost measurement will be impacted by emergency physician decisions regarding imaging use, hospitalization, and referrals. Note that this category’s contribution to your total score will rise to 30% by 2021 indicating CMS’s critical focus on reducing overuse and improving the value of healthcare services.


Clinical Practice Improvement Activities (15% of CPS in 2019): This category remains one of the least defined in regulation, but likely to have the most impact in engaging physicians in clinical practice change towards value. Over 90 proposed Performance Improvement Activities have been identified by CMS as qualifying; however emergency physicians may not be eligible for many of them, such as starting patient-centered medical homes (PCMH). Many activities do align with current ABEM Maintenance of Certification requirements, Joint Commission activities and local credentialing processes such as clinician engagement in Patient Safety and Practice Assessment and Emergency Preparedness and Response work. As CMS further defines this program, emergency physicians can be sure that they will see more local efforts by EDs to join quality collaboratives such as ACEP Emergency Quality Network (E-QUAL) ( and to participate in QCDRs such as the CEDR to consolidate and streamline quality improvement activities required by CMS, ABEM, and TJC.

Moving to alternative payment models
Is your head spinning trying to grapple with these 4 new categories? Well, you have a choice—if you don’t want to try to meet all the MIPS requirements, you can instead engage in the “Advanced APMs”. If you opt to participate in an eligible APM, your MIPS exemption means you avoid all the MIPS bonuses and penalties, but you instead take on the shared risk of the APM and will be rewarded with a 5% payment bonus each year. In fact, some emergency physicians with favorable operational or financial integration with hospitals, primary care physicians, or specialists may be already participating in Advanced APMs. For example, groups who are participating in a CMS Next Generation Accountable Care Organization (ACO) model may qualify as an Advanced APM. However, participation in an APM may not be sufficient for emergency physicians that can’t control the insurance case-mix of their EDs to ensure they meet the minimum patient requirements of CMS. So until efforts such as the ACEP Advanced Payment Models Taskforce or other groups can develop advanced APMs that emergency physicians can enter with both private and public payers contemporaneously, almost all physicians working in the ED will likely be participating in the MIPS program.

Open Questions
Even if the law is executed without any changes or amendments, and clinicians successfully transition into this brave new world of value-driven payments, several questions remain. Will the 0.5% annual increases stay even close to healthcare inflation? How will CMS group or separate clinicians within a specialty with such varied practice settings and quality goals like emergency medicine? How will different types of emergency physician groups fare in the MIPS environment? As evidence by the AMAs recent advocacy effort to delay the implementation of MACRA and the voluminous regulations written by CMS, there is much uncertainty in the future of physician payments- but one thing is for sure: emergency physicians are about to face a sea of change that will forever change the practice of emergency medicine and the business models that succeed in the already forgotten SGR past.


  1. Quality Payment Program: Delivery System Reform, Medicare Payment Reform, & MACRA: The Merit-Based Incentive Payment System (MIPS) & Alternative Payment Models (APMs), Available at: , Accessed July 5, 2016
  2. Breaking Down The MACRA Proposed Rule. Health Affairs Blog. Available at:, Accessed July 5, 2016
  3. Public-Private Payer Partnerships to Proliferate Under CMS. Available at:, accessed July 6, 2016
  4. Taking Control of Quality Measurements. Emergency Physicians’ Monthly. Available at:, accessed July 6, 2016

The authors acknowledge Craig Rothenberg MPH for his assistance with preparation of figures.


Dr. Venkatesh is the Director of Quality and Safety Research and Strategy in the Department of Emergency Medicine and Scientist in the Center for Outcomes Research and Evaluation at Yale University. He also chairs the Quality Measures Subcommittee of the ACEP Clinical Registry Committee and co-leads the ACEP Emergency Quality Network (E-QUAL).

HEALTH POLICY SECTION EDITOR Dr. Pines is a practicing emergency physician and a Professor of Emergency Medicine and Health Policy at the George Washington University.

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