- The Medicare Access and CHIP Reauthorization Act (MACRA) is about to revolutionize reimbursement for providers of Medicare Part B services. MACRA, which replaces the flawed Medicare sustainable growth rate (SGR), links the majority of fee-for-service payments to value and quality and adjusts reimbursement rates based on a provider's performance relative to his peers. For eligible clinicians, risk is now unavoidable and the race to demonstrate improvements in the cost and quality of care is already underway.
Eligible clinicians must begin to prepare today for the effects of this sweeping legislation if they intend to be successful tomorrow.
MACRA establishes two payment tracks: Advanced Alternative Payment Models (APMs) and the Merit-based Incentive Payment System (MIPS). Very few organizations will qualify as Advanced APMs, leaving the majority of eligible clinicians subject to MIPS.
Under MIPS, eligible clinicians will be scored and ranked against each other nationally, and these rankings will determine payment bonuses and penalties. Scores are based on quality, resource use (i.e., cost), advancing care information, and clinical practice improvement as follows:
- Quality: 50% in 2017; drops to 30% in 2019
- Resource use: 10% in 2017; increases to 30% in 2019
- Advancing care information: 25%
- Clinical practice improvement: 15%
Eligible clinicians subject to MIPS should start preparing now in order to ensure they are not subject to negative payment adjustments and can instead capitalize on the strong bonus potential. The best strategy is to focus on the two areas of the MIPS score that will most differentiate high and low performers as the program evolves: quality and cost.
Quality is more heavily weighted in the first few years and is expected to be a differentiator among the middle and bottom tier performers. Cost is much more difficult to control, and it is expected to be the most highly differentiating category. Clinicians that are able to get ahead of their peers in the cost category are likely to stay ahead, and also will be the best prepared to succeed under APM and Advanced APM models when needed.
In order to optimize payments under Advanced APMs, MIPS and APMs subject to MIPS, eligible clinicians should focus on these key areas that have the most immediate impact on improving quality and cost and best prepare them for the future:
1. Join an APM team and fully participate
Not surprisingly, solo practitioners and smaller clinics are projected to be the hardest hit by negative payment adjustments. Controlling cost and quality is a team sport across multiple providers, not just your practice. By coming together, clinicians can pool risk, pool resources to implement improved processes and technology and participate in co-management agreements that will help to improve care coordination for all attributed patients.
Additionally, eligible clinician scores will be reported publically, either individually or as a group. If clinicians “go it alone” and don’t score well, it may become very difficult to join an APM. The basic economics at play here suggest that joining an APM is a good strategy. And every APM should get prepared to take on risk before it is needed.
2. Take control of downstream spend by coordinating referred care with high-value referral partners
The average primary care physician makes 1,000 referrals every year, thereby influencing $10 million in downstream healthcare spend. That means that a group of 100 primary care physicians influences one billion dollars of healthcare spend every year and may have over 16,000 patients in the process of receiving care elsewhere at any given time. On average, up to half of this spending may be on Medicare patients. All of this begs the question – how can you successfully manage cost if you don’t know where your patients are?
The single most overlooked opportunity to control both cost and quality is the referral, because it is both the trigger point that money is about to be spent and an early indicator of a decline in health. Only by placing patients with the highest value provider and maintaining visibility into that patients care across the continuum can providers effectively manage both cost and quality.
According to the Engelberg Center for Health Care Reform at Brookings, developing a high value referral network is critical to success. Closed-loop referral management allows clinicians to refer within their high value referral network, make sure referrals are appropriate and complete so diagnosis and treatment are expedited, coordinate and collaborate with other providers within that network and maintain visibility into the status of patients while they are being cared for by others. By coordinating referred care for their patients across the community, clinicians are able to maintain control of the downstream quality and cost of care, thereby maximizing their MIPS score and/or APM revenue.
3. Participate in Medicare’s Chronic Care Management Program
Engelberg also cites managing high-risk patients as a key to success in accountable care. Given that 93% of Medicare fee-for-service spend is on people with multiple chronic illnesses, the importance of proactive and frequent care management of poly-chronic patients cannot be overstated under MACRA. An effective way to address these high risk patients is via the CMS CCM program (CPT 99490), which provides monthly non-face-to-face clinical support between office visits for patients with two or more chronic conditions. Through CCM, CMS is both subsidizing the necessary infrastructure and resource investments to be successful under MACRA and helping to fund preventive care management of the most costly segment of the population. Take advantage of it.
While the final rule won’t be known until late in the year, we know enough now to take action in the right direction. Clinicians that do will have a much higher probability of avoiding penalties. And those that start sooner will also have a first-mover advantage that is hard to catch up to. Regardless of how the final rule shakes out and whether or not the start of the performance period is delayed, the strategies outlined above will prepare clinicians to be successful in the new world of risk-based payments.
Mark Hefner is CEO of Infina Connect Healthcare Systems, the leading provider of SaaS referral coordination solutions. Previously he led healthcare IT businesses for Allscripts, GE Healthcare and Hill-Rom. Mark holds a BS in Electrical Engineering and a MS in Management from Georgia Tech.