June 19, 2017

MACRA and Value-based Purchasing

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Before I get into detail on this topic, let me establish a baseline understanding. Whether it be the Medicare Access and CHIP Reauthorization Act (MACRA) and value-based programs; the Healthcare Effectiveness Data and Information Set (HEDIS) measures, used to measure performance on important dimensions of care and service; or even Medicare Star Ratings, the success of these and other related programs and mandates focuses on the trusted and timely exchange of clinical data between providers, health plans, and regulators.

This data exchange is similar in construct to what we have been doing since 2004 under HIPAA-AS to support the administrative side of healthcare; if you think about it, HIPAA-AS is primarily focused on pre-service (authorizations) or post-service (claims and payments) matters. In this clinical construct, we are talking about exchanging data in the clinical perspective from initial encounter through the patient/member care continuum – to, of course, achieving healthy outcomes.

To support this clinical data exchange, we utilize the current chain-of-trust technical infrastructure with all of the security and privacy protocols that are currently in place – there’s no sense in reinventing the wheel here.

With that as a preface, let’s turn our attention to some examples of value-based programs with which Florida Blue (Florida BlueCross BlueShield) is currently engaged. As we walk through this, think in terms of the future state and how we all need to increase collaboration and coordination in order to achieve improvements in clinical outcomes.

When we’re looking at value-based programs, Florida Blue typically looks at four program structures: patient-centered medical homes (PCMHs); accountable care organizations (ACOs); episode-based payments (or bundled payments); and pay-for-performance).

Patient-Centered Medical Homes

PCMHs are truly the foundation for accountable care; it’s where your primary care physician leads a team that’s at the hub of patient care. The PCMH typically engages the patient’s family in the treatment process, offers extended office hours, uses e-prescribing capabilities, and explains treatment plans. Florida Blue gives an incentive for providers when they meet and exceed cost and quality measures for the PCMH.

Accountable Care Organizations  

ACOs are like a patient-centered medical neighborhood. It takes the PCMH model and brings in the hospital and specialists. The goal is that everyone works together, rowing in the same direction. ACOs use a total cost-of-care benchmark and include things like pharmaceutical costs; it also includes all total expenses for a given year as an opportunity to obtain an incentive. We currently do this primarily for our commercial business.

Episode-Based Payments or Bundled Payments

This is where you have a primary provider such as a surgeon, who we’ve reimbursed for everything surrounding an episode of care. For example, let’s take Dennis Jones’s hip replacement, about which he previously shared details.

Whenever a patient goes in for a hip replacement, we reimburse the surgeon, who will then be compensating everyone involved in taking care of the patient for that acute episode (the anesthesiologist, the hospital, any supplies that are used, etc.). Bundled payments create an “accountable care structure” for an acute episode. The surgeon owns that hip replacement and knows how they are going to get reimbursed for it.

We also have some quality metrics in place with bundles to ensure that providers are not achieving cost goals to the detriment of quality. Bundled payments are more focused and limited because they’re associated with acute care. As an example, if you’re going to do a bundle for a hip replacement, you might cite 200 people per year, per bundle. ACOs and PCMHs can cover approximately 10,000 people annually, with all of their experience and medical care. Bundles offer significant financial value to providers when they are strategically positioned, appropriately funded, and properly utilized.

Pay-for-Performance Quality-Based Incentive Programs. 

Typically these are present in hospital contracts wherein we base a fee-for-service increase contingent on clinical quality measures. These programs have been in place for a while, but we are seeing less and less of them going forward due to the aforementioned programs.

So whether it be a PCMH, ACO, episode-based payments (or bundled payments), or pay-for-performance quality-based incentive programs, you can quickly recognize where the exchange of clinical data becomes critical – remember, we are all after the same thing here: a healthy outcome for your patients/our members.
George Vancore

George V. Vancore, Jr. is the senior manager of mandates and compliance for Florida Blue. He is responsible for business process and systems integration of regulatory mandates and compliance programs throughout the enterprise. Mr. Vancore holds an undergraduate degree in computer science with a minor in mathematics.

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