The impact of MACRA payment adjustments on hospitals—positive or negative—could be in the millions annually.

In this interview, Chris Stanley, a director at Navigant, shares some of the key areas where physicians and hospitals may be unprepared for federal alternative payment requirements.

On how well prepared providers are for MACRA. We’ve seen surveys of physicians, hospital executives, and other key stakeholders suggesting a heightened awareness of MACRA (Medicare Access and CHIP Reauthorization Action of 2015) and the “headline” view of the program. We are finding, however, that many physicians and organizations are not prepared for key decisions and actions that they need to take right now and in the future to be successful under MACRA’s Quality Payment Program (QPP).

For example, all physicians within the pure Merit-Based Incentives Payment System (MIPS) track need to decide whether they will submit minimal data for 2017—to avoid a penalty—or complete data for the entire year—to maximize payment increases. Another key decision is that organizations in Track 1 Medicare Shared Savings Program (MSSP)—the MIPS-alternative payment model (APM) track for 2017—need to decide within the next couple of months whether they will move to Track 3 or a next generation ACO in 2018—the APM track—or remain in Track 1.

On unanticipated or poorly understood MACRA implications for providers. From the provider side, we know that physicians are being encouraged under the rule to join ACOs (accountable care organizations) and be qualifying providers under the advanced APM track. For many ACOs, this could mean that physicians who have not been aligned with their sponsoring system may look for affiliations so they can receive their 5 percent bonus. However, for ACOs, it’s important to evaluate or vet all new physicians. Do they really understand what the role of the ACO is and are they willing to actively engage and participate within the ACO? Or are they simply looking for “shelter” and won’t fit with the culture of the ACO or help drive success? Picking the right physicians within the ACO is very important, and there are some strategic and analytic capabilities that can be used to help pick the right partners.

Also, some providers believe that MACRA has been delayed: This is not true. The reporting requirements were decreased through the final rule published at the end of 2016; however, reporting still needs to occur to avoid a penalty. So physicians—or health systems—need to determine soon, if they haven’t already, what they will report for 2017. Within the MIPS track, physicians will receive a penalty in 2019 if they don’t report anything to CMS (the Centers for Medicare & Medicaid Services) for 2017, due by March 31, 2018.

On engaging and educating physicians around MACRA. Based on my experiences at Catholic Health Initiatives, it’s clear that hospitals and health systems can serve a critical role in awareness, preparation, support, and reporting as required under MACRA’s QPP. For employed physicians, health systems should take a lead role, and will be directly impacted by their physicians’ payment adjustments. Many affiliated and community physicians and advanced practice clinicians, such as nurse practitioners, are also looking to their local health systems for guidance and support—a role that systems should eagerly embrace.

Having health systems play a role in education and preparation is a win-win for the system and physicians. Systems that employ physicians will see a direct increase or decrease in revenue for Part B services, which escalates quickly over the first four years of the program. At Catholic Health Initiatives, we modeled this payment adjustment impact—positive or negative—in the millions annually, depending upon the size and makeup of the provider group. As hospital and system margins are being compressed, this impact will be huge.

Many non-employed community physicians and advanced practice clinicians are looking for trusted partners in this time of uncertainty. For health systems, providing education, guidance, and appropriate support is a competitive advantage for physicians looking to align with hospitals, clinically integrated networks, and health systems.

This process is not without its challenges. Physicians are busy people, primarily focused on providing high-quality, excellent care to their patients, and it can be hard to find time in their busy day to educate, prepare, and engage. However, in my experience, physicians are very interested in this topic and will make the time to learn, engage, and succeed, with the right support.

On MACRA staffing strategies. With the complexity of MACRA—including MIPS, advanced APM tracks and the “pick your pace” reporting options for performance year 2017—there is no single correct strategy for staffing for MACRA.

For example, physicians who are part of an ACO can rely upon the ACO’s capabilities for much of the reporting requirements, and additional staff would not be needed. For non-system employed physicians who are not within an ACO or alternative payment model, additional duties will be required in 2017 and beyond, and many practices will need to hire additional staff at least by the end of CY17.

Most of the MACRA-related responsibilities involve collection of data and reporting to CMS, so individuals with quality, data/analytics, and reporting experience are ideal. But the longer a practice waits to hire needed staff, the fewer capable employees with the right skill sets will be available, and those who are available will require higher wages.

In addition, for physicians who are in the pure MIPS track, they will need to have an electronic health record (EHR) that meets the requirements within the advancing care information category (a portion of the composite performance score or CPS). Practices in this track will also need to focus on improvement activities within the practice. Work in both of these areas may require additional hiring of staff with health IT and performance improvement skills in order to avoid penalties and succeed under the MIPS track.

On MACRA and the shift to value-based care. MACRA should not be considered in isolation; instead, it’s an example of how the healthcare industry will continue to move to payment for value rather than volume.

MACRA is one of many value-based payment changes that are impacting physicians. Similar changes are underway through commercial and state payers, as well as direct-to-employer programs. And administrative requirements, including needed staff, go well beyond MACRA readiness. The same staff and capabilities needed for MACRA will also support other value-based programs.

This isn’t a “hoop to jump through.” The purpose of this law, the actions that need to be taken, and the success to be gained within the program will apply to payment changes by commercial health plans and state Medicaid programs, and even employers. We are already seeing health plans take MACRA concepts into consideration as they are working with providers on value-based programs.


Christopher Stanley, M.D., MBA, is a director in Navigant’s healthcare practice.

Publication Date: Friday, May 12, 2017