On April 16, 2015, President Obama signed into law H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), which reforms Medicare payment policy for physician services and adopts a series of policy changes affecting a wide range of providers and suppliers. Most notably, MACRA permanently repeals the statutory Sustainable Growth Rate (SGR) formula, achieving a goal that has eluded Congress for years. This step overrides a 21.2 percent across-the-board cut in Medicare physician payments that briefly took effect April 1, 2015, and ends a long cycle of Medicare physician fee schedule (MPFS) cuts being triggered automatically and Congress then responding with temporary patches. Instead, after a period of stable payment updates, MACRA will link physician payment updates to quality, value measurements, and participation in alternative payment models. MACRA also extends certain expiring Medicare and other health policy provisions, including a two-year extension of the Children’s Health Insurance Program (CHIP). To finance these provisions, MACRA reduces market basket updates for post-acute care providers, revises inpatient hospital payment rate updates, restructures Medicaid disproportionate share hospital (DSH) reductions, imposes additional income-related adjustments for Medicare Part B and Part D premiums, and bars first-dollar Medigap coverage policies. Finally, MACRA includes a number of policy provisions, including: new program integrity policies; a binding bid requirement under the durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program; an additional delay in enforcement of the “two midnight” hospital inpatient status policy; and revisions to payment for global surgical packages. This Client Alert summarizes the major Medicare and Medicaid provisions of MACRA, focusing on those provisions we believe to be of most interest to our clients. We would be pleased to provide additional details upon request. To read the full Client Alert, click here.