What Is MACRA stand for in Healthcare

MACRA Quick Definition and Summary



The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) marked a significant shift in how Medicare pays physicians and other clinicians. It was passed after nearly two decades of failed attempts to fix the Sustainable Growth Rate (SGR) formula—a mechanism that repeatedly threatened steep, automatic cuts to physician reimbursement.

At PCG Software, this legislation has been analyzed through both a clinical and administrative lens. PCG’s Chief Operating Officer, Andria Jacobs, RN, MS, CEN, CPHQ, brings more than 30 years of healthcare experience across payer operations, medical management, and clinical care. Before joining PCG, Ms. Jacobs served as Administrative Director of Medical Management at VertiHealth Administrators. They previously worked as an independent consultant in ambulatory care and practice management, supporting hospitals, physician groups, and academic institutions, including UCLA.

That perspective matters because MACRA was not simply a payment fix—it reshaped incentives, reporting requirements, and long-term risk for providers, hospitals, and health plans.

What is the Goal of MACRA?

At its core, MACRA was designed to stabilize physician payment and move Medicare away from volume-based reimbursement toward value-based care. In that sense, it was a step forward and clearly preferable to the alternative: a scheduled 21 percent payment cut that would have taken effect in April 2015 under the SGR formula.

However, MACRA was never a comprehensive solution. While it repealed the SGR, it replaced it with modest payment updates—providing only a 0.5 percent annual increase for five years, followed by a prolonged period of flat payments. From 2015 through 2020, clinicians effectively faced rising costs with no meaningful increase in reimbursement.

For many physicians and non-physician practitioners, this raised a fundamental question: Does a half-percent increase meaningfully support the ability to care for Medicare patients while maintaining a financially viable practice? The answer, for many, was no. Concerns about sustainability emerged almost immediately.

Structural Issues Identified at Inception

One of the most significant concerns with MACRA was how it was financed—or more accurately, how it was not. The legislation contained no dedicated funding mechanism to fully offset the cost of repealing the SGR. According to Congressional Budget Office estimates at the time, the overhaul was projected to cost more than $175 billion over a ten-year period.

Rather than solving the funding gap, MACRA was expected to increase the federal deficit by approximately $141 billion, shifting financial pressure elsewhere in the system. Much of the offset came through reduced Medicare reimbursement to hospitals and post-acute care providers, as well as increased cost-sharing for beneficiaries. This included higher Medicare Part B and Part D premiums, disproportionately affecting older Americans still in the workforce or living on fixed incomes.



While MACRA avoided the immediate harm of deep physician pay cuts, it failed to account adequately for rising malpractice costs, increasing practice overhead, and long-term inflationary pressures. These omissions raised legitimate concerns about whether the law could function as a durable solution.

Twenty-plus years to Reach a Partial Solution

It took CMS and lawmakers nearly 18 years to resolve the SGR issue, culminating in the last-minute passage of MACRA. That delay came at a cost. Prolonged uncertainty created administrative upheaval, claims processing delays, payment backlogs, interest accruals, and widespread frustration among providers and healthcare staff.

Now, revisiting this article 3 years after writing it, very little has changed...

MACRA’s implementation period highlighted the consequences of delayed policymaking in healthcare. It also reinforced the importance of proactive engagement. Providers, hospitals, and health plans benefit when they maintain open communication with CMS regional offices, professional organizations such as the AMA, and policymakers to obtain timely guidance and advocate for workable solutions.

As HHS and CMS continue to refine MACRA’s provisions, stakeholder input remains essential.

Time will tell for MACRA results

MACRA was enacted quickly, under pressure, and without a fully resolved funding strategy. History suggests that legislation passed under such conditions often presents challenges in compliance, implementation, and unintended financial incentives.

What remains clear is that pricing providers out of Medicare or Medicaid would undermine access to care and further strain the healthcare system. Whether MACRA evolves into a sustainable framework—or requires substantial reform—will depend on how its provisions adapt to real-world economic and clinical realities.

For now, time will tell.