July 13, 2015
Though the phrase “doc fix” was making headlines, many people are unfamiliar with other significant provisions of the legislation passed on April 16, 2015 — also known as the Medicare Access and CHIP Reauthorization Act (MACRA). The “doc fix” portion of the Act repealed the previous Medicare physician payment formula and replaced it with a new one focused on quality and value — but it did much more than that.
John Barkett, director of health policy affairs for exchange solutions at Towers Watson, recently wrote a detailed explanation for Employee Benefit News about why there is so much more to MACRA than what dominated the news. According to Barkett, MACRA touches on 29 different sections of Medicare law, making it the 15th broadest law passed since the creation of Medicare. Here are a few examples of what makes MACRA noteworthy beyond the doc fix:
- It extended Children’s Health Insurance Program (CHIP) funding for 2 more years
- It introduced the Merit-based Incentive Payment System (MIPS) to grade physicians on the quality of their care, reward them for improving patient outcomes, and penalize them if they don’t.
- It rewarded doctors for caring for the chronically ill by introducing alternative payment models that better reward doctors providing that service.
To read Barkett’s full breakdown of MACRA’s benefits published June 29, 2015, click here.
On June 25th, the Supreme Court handed down a much-anticipated decision on the King v. Burwell case. The case, which concerned the status of subsidies for individuals purchasing plans under the Patient Protection and Affordable Care Act (ACA), would either reaffirm subsidies for plans on the federal exchange or eliminate them. The case was based on a small quirk in the language of the ACA, but was poised to undermine the entire Act if the Court had voted in favor of the plaintiffs.
The historic 6-3 decision in favor of allowing subsidies on both state and federal exchanges ensured that a key provision of the ACA — one that is largely responsible for the gains in insuring the uninsured — remains in place.
John Barkett, Director of Policy Affairs for Towers Watson’s Exchange Solutions, explained the impact of the ruling in a recent article for Managed Healthcare Magazine.
First, according to John, with subsidies allowed for purchases on both federally and state-run exchanges, all exchanges will continue to operate as they have over the past two years. Second, over time more states that have established their own exchanges will likely transition to the federally run exchange. (As prior evidence of this trend, Oregon, Nevada, and Hawaii all transitioned to the federal exchange in the last year.)
Conversely, had the Supreme Court ruled for the plaintiffs, an estimated 6.4 million people would have lost their tax credits and seen their monthly premiums increase an average of $263 per month, causing many individuals to no longer afford coverage and drop out. Healthy people in particular would likely drop coverage, leaving a larger percentage of sick people in the risk pool. These cascading effects could have effectively undermined the ACA.
The ruling, said Barkett, also is notable for what it won’t do. “The ruling won’t disrupt the individual insurance market. It won’t force millions of people off their plans. It won’t deprive managed care organizations of millions of customers. The Affordable Care Act is here to stay. Healthcare providers and purchasers should focus on how they can best leverage the ACA in their business strategies.”