Tuesday, 26 July 2016 06:19

Yes, No, Maybe So: Getting Ready for MACRA

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Over the last decade, the switch to a value-based payment model has continued to intensify. Healthcare is always searching for opportunities to improve quality and cost while purchasers, especially federal and state governments, are demanding it. No longer tolerated are payments for poor quality, poor service, or waste.

Obviously, the herculean challenge associated with our federal and state regulatory processes is actually formulating plans, achieving consensus, and then enacting the law. To exacerbate this challenge is the vacillation on final decisions in Washington, D.C., which causes confusion and perpetuates doubt because of the associated delays. 

For example, we’ve seen delays with ICD-10, the HITECH (Health Information Technology for Economic and Clinical Health) Act,and now potentially, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. During a U.S. Senate Committee on Finance hearing, Andy Slavitt, acting administrator for the Centers for Medicare & Medicaid Services (CMS), indicated that there could be some revisions to the proposed rule, including a possible delay in the Jan. 1, 2017 proposed start date. It appears that delays with MACRA will be no different than those connected to other key pieces of healthcare financial legislation, which is both disappointing and frustrating.

Regardless of the impending delay, healthcare payors and providers must be ready! To that end, what is MACRA, and what can you do to be ready for yet another regulatory requirement?

First of all, at a very high level, MACRA establishes new ways to pay physicians for care delivered to Medicare patients. Within the Quality Payment Program (QPP), participating providers will be paid based on quality and effectiveness of care with two new incentive structures:

One incentive structure is the Merit-Based Incentive Payment System (MIPS), which is described below.

  • It combines three existing incentive programs and adds a fourth component to promote ongoing improvement and innovation to clinical activities into one new QPP.
    • The Physician Quality Reporting System (PQRS), the Value Modifier (VM), and the Medicare Electronic Health Record (EHR) incentive program.
    • Clinical Practice Improvement Activities (CPIAs)
  • Measures will be based on quality, resource use, clinical practice improvement, and meaningful use of electronic health record (EHR) technology
  • Positive, negative, or neutral adjustments to the base rate of Medicare Part B payment will increase each year starting in 2019
  • Adjustments are required to be budget-neutral, demanding no additional spending, as higher performers are reimbursed from reduced payments of poorer performers
  • Positive and negative adjustments will increase from 4 to 9 percent from 2019 (based on performance in 2017) to 2022 and thereafter

The other incentive structure is the Alternative Payment Models (APMs), which are described below.

  • Provides an alternative payment method to incentivize quality and cost savings for Medicare providers
  • Some providers in APMs are also subject to MIPS, but receive favorable scoring with correspondingly higher reimbursement rates
  • Requires use of certified EHR
  • Payments must be calculated using evidence-based quality measures that are reliable and valid
  • Eligible APMs will only include payment models in which physicians bear “more than nominal” risk for financial losses
  • Examples of APMs include accountable care organizations (ACOs), patient-centered medical homes, and bundled payments
  • Opportunity for incentive payment to providers who qualify for advanced APM

As with all healthcare legislation, both providers and payors must be ready. Ensuring the viability of working clinical information systems, sharing information across the care continuum, optimizing clinical workflows, and engaging patients for education and compliance are paramount for success. The following are some key areas regarding how providers will be impacted and can be prepared.

A few other things to remember:

  • MACRA rules and payments only apply to Medicare Part B payments.
  • Providers will need to know what is happening across the system outside of their offices regarding patient outcomes for a longitudinal view. 
  • Informatics will be key, since the reliance for good and accurate data is critical, and it will involve multiple delivery systems.
  • This may require the need to change or modify technology and data infrastructure in order to ensure that current EHR systems can support data interoperability.
  • MIPS data reporting will need to be aggregated, assessed, and mined quickly, efficiently, and accurately to target opportunities for intervention and action.
  • Data sharing standards will be a key component to enable changes in patient care.
  • Penalties for not reporting or for low quality may impact financials this year.
  • Physicians must choose MIPS or APMs after careful review of financial benefit/impact and potential to influence holistic care delivery and adherence to care plans.
  • Understand payment outcomes to MACRA-established physician fee schedule updates each year. Also, understanding exemptions from MIPS will be critical.
  • If a PQRS tool is currently used, determine if it can be leveraged for MIPS requirements. 
  • Analyze current quality and resource use reports (QRURs) to understand your performance in terms of cost and quality to help prioritize improvements.
  • If your practice doesn’t provide chronic care management (CCM), consider the cost-benefit opportunity for increasing revenue to support performance and quality improvements.

To fully promote the focus on paying for value and better outcomes, there is opportunity for payors can consider the following actions with the launch of MACRA:

  • Renegotiate existing Medicare provider contracts to ensure incentives and penalties are included for quality improvement, customer servicing, and cost reductions.
  • Provide transparency for provider and health plan costs, quality, and service performance.
  • Provide comprehensive chronic care management services for the disease states aligned with HEDIS, PQRS, and MACRA.

Regulatory changes bring challenges, but also opportunity to transform internal processes to improve quality and financial performance. Also, with transparency, the opportunity presents itself to market your performance results nationally to promote your health system as a benchmark-setter for quality improvement, potentially establishing yourself as a center of excellence.

Although there’s uncertainty of when MACRA will be enacted, it is advisable to be ready with your planning process. Enacting the proposed guidelines now will certainly improve your organizational readiness to ensure that your desired results are achieved – and hopefully exceeded.       

About the Author

As senior vice president of healthcare solutions for HighPoint Solutions, Jim is responsible for business and financial growth, new product/service development, strategic planning, business partnerships, and staff development across our healthcare practices. Prior to joining HighPoint, Jim spent 14 years as CIO and VP of enterprise operations at Priority Health. He has also held senior positions at JS Advisory Services, Ernst & Young, and the Henry Ford Health System.

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Last modified on Wednesday, 27 July 2016 18:13

As Senior Vice President of Healthcare Solutions, Jim is responsible for business and financial growth, new product/service development, strategic planning, business partnerships, and staff development across our healthcare practices.  Prior to joining HighPoint, Jim spent 14 years as CIO and VP of Enterprise Operations at Priority Health. He has also held senior positions as JS Advisory Services, Ernst & Young, and Henry Ford Health System.