What to expect from MACRA: The early years

By Caitlin Greenbaum, Director of Health Policy & Strategy, The Health Management Academy   /  09 May 2017

MACRA legislation passed in April 2015. When the initial version of the rule came down, the industry collectively braced for declining revenues, the avalanche of administrative paperwork and the increase in overhead costs that would be required to comply.

When the final rule was issued in October 2016, the tempered requirements seemed to point toward fewer projected negative payment adjustments in 2019, the target year for MACRA’s first Quality Payment Program distributions, and the tension subsided a little.

Even with the new allowances in reporting and threshold scores, the MACRA structure makes clear that there’s an abundance of work to be done, especially around efforts to promote care coordination and communication.

Year 1: 2017-2018

Now that we’re already into 2017, the first official reporting year, tensions are rising again because, even though most physicians acknowledge they are going to participate, the majority have not yet plotted their course or defined a compliance strategy.

And if you’re in the group that hasn’t figured it all out yet, the good news is you’re not alone.

According to a recent poll conducted by The Health Management Academy, almost half of the physician and practice leaders who participated are not moving very quickly toward adopting value-based payment models. In fact, only 4% claimed to be moving “very quickly” while almost 40% admitted to moving “very slowly” toward value-based care.

Somewhat surprisingly, the same is true even for large hospital systems. These organizations are perceived to be the driving force, the ones moving the fastest toward the end goal of value-based care, and yet, per a similar poll, few of the large systems are moving very quickly.

Only 8% of large hospital systems polled are moving swiftly toward implementing value-based payment models. – The Health Management Academy, 2017

The Quality Payment Program, however, is going to be the catalyst for healthcare organizations, both large and small, moving more aggressively toward these models in the next couple of years.

The MACRA structure and how you fit in

By now, you know that reimbursements are going to be variable based on performance, even if you’re still practicing in a fee-for-service structure and, like most, have not yet begun practicing in the more advanced tracks.

There are four participation categories, which fall underneath two broad tracks—the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Model (APM) track.

The four MACRA Quality Payment Program participation categories. – The Health Management Academy, 2017

The two categories in the middle of the chart are bridge areas, and won’t apply to many providers right now, but they can be considered as stepping stones from MIPS to the Advanced APM track.

The MIPS track equates to fee‑for‑service, and most physicians will, at least initially, fall into this track. They’ll balance their steps toward embracing more downside risk by continuing to practice fee-for-service medicine, and so they must prepare to report performance metrics and have payments adjusted based on those metrics in 2019.

On the other end of the spectrum is the Advanced APM track. To reach “Advanced APM Qualifying Clinician” status, physicians must engage significantly in certain downside risk-bearing payment models. In this track, participating physicians will enjoy fewer reporting requirements and more financial incentives, while still being held accountable for delivering high-value care. The only way to sustain a profitable practice in this track is to eliminate wasteful workflows that result in inefficient and unreliable communication processes among all members of the broader care team, even if they are not directly affiliated with your practice.

Year 2: 2018-2019

In the first months of 2018, physicians practicing in the MIPS track—again, that will be most of you—will be required to report metrics in three performance categories based on at least 90 consecutive days of work. This should come as more good news, because if you haven’t started measuring yet, or you’re not impressed by your initial metrics, you still have time to pivot before the data is due in early 2018.

CMS will use that data to give each physician a composite score, which will determine the payment adjustment he or she receives in 2019.

The Quality Payment Program’s initially proposed rule was accompanied by disheartening projections in terms of payment adjustments, particularly for solo physicians and small practices. While the finalized October 2016-issued rule basically guaranteed that all physicians who submit any performance data will receive at least a neutral payment adjustment, physicians are still bracing themselves for less-than-average profit margins.

As MIPS is largely a budget-neutral program, less risk equals less reward. Since fewer physicians will be subject to negative payment adjustments in 2019 (see Image 3 below), fewer dollars will be available to distribute to those who perform well.

Only 20%—versus 87%—of physicians in smaller practices are projected to experience negative payment adjustments in 2019. – The Health Management Academy, 2017

Simply put, the best way to ensure your adjustment is as high as possible is to garner a high composite score.

Effectively coordinating care with your patients’ broader care teams as accurately and efficiently as possible to reduce waste and unnecessary overhead costs is a good first step toward achieving high scores in all four MIPS performance categories.

Back to the present

One of the goals of MACRA is to drive the costs out of treatment while still providing high-value care. Physicians will be in a much better position to deliver this dichotomy, and advance to a more rewarding reporting track, when the barriers to real-time care coordination have been broken down.

Seamless care team communication and collaboration among interdisciplinary, and often disparate, providers will be a foundation on which you can lay the groundwork for improved care coordination, which leads to less waste, improved efficiencies, and ultimately better outcomes, all of which underlie value-based care and the successful reduction of healthcare costs.

Source: “Making Sense of MACRA” webinar. The Health Management Academy and PerfectServe. March 2017. 

Watch the full webinar to learn even more about MACRA and how it applies to your practice.

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