Updated on: November 27, 2017

MACRA: Understanding its Current and Future Impact

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Original story posted on: November 22, 2017
Predicting the future of MACRA is difficult as goals continue to change, nonetheless, MACRA appears to be here to stay.

According to a recent study reported on in The Lancet, healthcare spending per capita is higher in the United States than in any other country in the world, and is unsustainable at the current rate. There is widespread agreement among healthcare stakeholders that care delivery and reimbursement must radically transform. Consequently, in 2015, a total of 92 out of 100 U.S. senators voted for the Medicare Access and CHIP Reauthorization Act (MACRA), triggering the shift to value-based care with two paths for reimbursement: The Merit-Based Incentive Payment System (MIPS) and risk-based Advanced Alternative Payment Models (AAPMs).

Where Are We Today? 

We are three-quarters of the way through the first performance year for MACRA, and practices are being affected in many ways. Most are working hard to understand and implement the complex requirements of the legislation. A key part of this effort involves working with electronic health record (EHR) vendors to ensure that their technology supports MACRA reporting requirements. Providers must also evaluate their operations, both administratively and clinically, to ensure that they are capturing the data that needs to be reported. The 2017 performance data will be reported from Jan. 1 to March 31, 2018. The amount of data reported will be determined by the Pick Your Pace option selected by the practice.

This year is a transition year for the implementation of MACRA, with the requirements being phased in slowly. For practices participating in MIPS, a very minimal amount of work is required in 2017 to avoid a negative payment adjustment. However, in 2018 there may be more requirements for practices to follow, so they should be using this time wisely to prepare for the coming changes.

What Should Practices Be Doing in The Near Term?

MACRA reporting requirements in the various categories are going to become more stringent over the next few years, placing a greater burden on practices to achieve the highest scores possible to avoid negative payment adjustments and maximize positive payment adjustments.

Although MIPS is the path most providers are on now, they should start looking at opportunities for participating in AAPMs. In 2024 there will be two fee schedules, with AAPM participants operating under a higher reimbursement schedule than MIPS participants. Those in AAPMs will receive a .75 percent annual increase, while MIPS participants will only receive a .25 percent increase. To maximize revenue, the goal for practices should be to drive toward successful AAPM participation.  

While MIPS will still be an option, those in MIPS will also face the possibility of a negative 9 percent payment adjustment and a lower fee schedule overall in 2024, based on 2022 performance.

Over the next one to two years, practices should be thinking about long-term goals, getting comfortable with the requirements for MIPS, and working on improving and maximizing their scores in the various categories. They should closely examine their practices to determine what operational and clinical changes they can make to reduce costs of care while increasing quality metrics. By identifying what drives those elements for their practice, they will have the knowledge base to begin building a strong foundation for other, more advanced value-based care models.

Where is MACRA Heading? 

The future of MACRA is difficult to predict, as the goal posts keep shifting. Recently, the U.S. Department of Health and Human Services (HHS) issued a proposed rule change to cancel two mandatory bundled payment models: the Episode Payment and the Cardiac Rehabilitation Incentive.

The Department also proposed reducing the number of locations mandated to participate in the Comprehensive Care for Joint Replacement (CJR) model, going from 67 to 34. The Episode Payment and Cardiac Rehab models were scheduled to start on Jan. 1, 2018, and the CJR model is currently in its second performance year.The Department noted in its proposed rule change that it was concerned that engaging in a large mandatory episode payment model at this time might impede its ability to engage providers in future voluntary efforts. It also concluded that reducing the number of required participants in the CJR model would allow it to better evaluate the effects of the model.

The reaction to these proposed rule changes has been mixed. Some stakeholders, such as the American Hospital Association (AHA), expressed concern that hospitals have already made investments in preparation for the new payment models, and delays or cancellations such as this might compromise long-term success. Others agree with HHS’s reasoning. There is also disagreement about the value of mandatory versus voluntary payment models. Hopefully, the HHS decision to cancel the models is not an indication that they are not willing to invest in additional pilot projects.

Assuming there is not continued pushback from HHS, such as under- or over-reimbursement for services provided, more bundled and alternative payment models incorporating collaboration among providers likely will come to the forefront over the next five years. Some sort of risk-based bundled payment model is likely to surface whereby multiple providers, such as hospitals and specialists, are reimbursed for caring for a specific disease and for sharing the risk for the outcomes of that care.

Certain unknowns come with these new emerging payment models. For example, have they been thoroughly tested to ensure that the participating providers are receiving appropriate reimbursement for the care they provide and the results they deliver, or is there some unintended consequence wherein a clinician is reimbursed for work they have not done? If the model is operating correctly, all providers participating in the care should be equitably reimbursed.

MIPS will continue, and in the long term, it should drive practices toward more outcome-based performance. Consequently, even practices participating under MIPS may have to submit data demonstrating improved outcomes and reduced costs.Practices generally seem ready to move to value-based care, so hopefully HHS, the Centers for Medicare & Medicaid Services, and private payers all will continue to move toward that goal.

Practices have already started investing in the technologies and additional staff needed to be successful, so if payers make investments and stay engaged, these models will continue to evolve.  

How to Succeed with the New Care Models?

Practices will have to make significant changes to their operations to thrive with the emerging value-based care models. In the past, with the Physician Quality Reporting System (PQRS) and Meaningful Use, practices had to report data, but they did not have to change their way of doing business in a meaningful way. To be successful in the value-based care world, significant transformational change must occur.

For instance, in many practices, physicians tend to operate independently, with a “silo mentality.” With most value-based care models, practices must move to team care, whereby a group of people is responsible for the care the patient receives. The team includes not only clinical staff, but also non-clinical employees who interact with patients. For some practices, this is a difficult transformation.

Education plays a key role, because everyone from the front desk to the back office of the practice must understand that they are all part of the care team and are jointly responsible for patient care and the resulting outcome. The practice also needs a leader to drive value-based care, making sure everyone understands their roles on the team. Additionally, this leader can help the practice utilize their performance reports to improve care, costs, and outcomes.

Technology will also be critical to the success of practices, whether they are participating in MIPS or an AAPM. They must make certain that they gather critical data for quality and cost reports, enabling them to determine if they need to change various aspects of their operations. Value-based care models are data-driven, and practices must have the right technology to capture and utilize the data they need.

Goals are Similar, but Approaches Vary

For the most part, payers, providers, and other stakeholders in the healthcare community are unified in their desire to see a new patient-centric approach to care delivery – one that will result in reduced costs and improved outcomes. Where they differ is in how to achieve this goal.

As long as constructive dialog continues, stakeholders collaborate, and providers start making significant changes in how they deliver care, the framework started by MACRA can grow, providing better outcomes and more cost-effective care.
Linda Pottinger, MBA

Linda Pottinger is the director of payer initiatives with the Innovative Practice Services team of McKesson Specialty Health, providing operational and educational support to practices as they prepare for value-based and quality payment programs.

Linda has more than 35 years of experience in the healthcare industry, both in financial and operational positions, including CFO at two Chicago area hospitals. She has also worked in and provided operational support to physician practices, including Rheumatology and Oncology specialties.

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