In a time of change in health care, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is one thing that is probably here to stay.
Amid the flux impinging on many healthcare policies and regulations, overall support for MACRA appears to be solid. The legislation, equally supported by both parties, aims to fundamentally shift physician organizations away from fee-for-service and toward value-based payment, not just in Medicare fee-for-service, but also across the Medicare Advantage, Medicaid managed care, and commercial markets. Consequently, it is important for physician organizations that wish to progress along the outcomes-based path not only to understand the legislation’s nuances and the implementation regulations issued by the Centers for Medicare & Medicaid Services (CMS) but also to make a commitment to the work.
The Timeline and Its Implications
MACRA comprises two distinct pathways: participation in the Merit-based Incentive Payment System (MIPS) and the option to adopt advanced alternative payment models (APMs).
At least initially, most clinicians will fall into the MIPS category, under which CMS uses a four-part composite quality score to determine an annual bonus or payment penalty, in addition to standard fee-for-service payments. MIPS breaks down into four reporting categories, three of which must be reported on in 2017 for payment in 2019:
- Quality performance
- Advancing care information
- Clinical practice improvement
- Resource use
MIPS is the new standard for how CMS will pay applicable providers—a term that refers not only to physicians who bill Medicare for Part B services but also to physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists. Only participants in advanced APMs or providers who meet the low-volume exception will be exempt from the program.
The advanced APM track makes financial incentives available for physician organizations that participate in certain APMs and have sufficient revenue or patient thresholds to be considered advanced. From 2019 through 2024, qualified providers will receive a lump-sum bonus payment equal to 5 percent of their prior year’s payments for Part-B-covered professional services. Beginning in 2026, qualified providers will receive a higher update to the Physician Fee Schedule than they would have if they were in the MIPS track. Note that advanced APM status is determined by CMS; physician organizations striving to participate in an advanced APM require the agency’s approval, and if approval is withheld, they automatically are placed on the MIPS track.
MACRA participation during 2017 determines payment adjustments for 2019. As such, providers should carefully consider their approach to MACRA compliance this year. Through December, physician organizations involved in MIPS can choose to participate in different ways. For example, they can submit measures for less than a year or for an entire year, or they can opt out of the program altogether. Each approach has payment ramifications.
Those physician organizations that opt not to participate will receive a 4 percent negative adjustment in 2019. Those that choose to minimally participate, such as by reporting a single quality measure or results from just one improvement activity, will not receive a bonus or a penalty, resulting in a neutral financial effect. However, those physician organizations that submit the required measures for 90 days will receive a small bonus, and those that submit for a full year will garner a more substantial payment.
After performance year 2017, payments are set to be based on a physician organization’s performance and not just its ability to report. Over the long term, bonus opportunities and potential negative adjustments are set to grow larger, making a solid MACRA strategy even more important for physician organizations.
Slow but Sure Progress
Even though MACRA went into effect on Jan. 1, 2017, most physician organizations are still at the beginning stages of compliance. Almost two-thirds of healthcare executives in practice management, director, and C-suite roles responding to a survey at the February 2017 annual Healthcare Information and Management Systems Society (HIMSS) conference in Orlando said their physician organizations were not ready for full MACRA implementation. However, most said they expected to participate in the program this year. Larger physician organizations appear to be better prepared than smaller ones, although even the larger entities that have a strategy mapped out are not necessarily set to put it into action completely.
Many physician organizations are overwhelmed by the depth and breadth of available MACRA information, causing them to be unsure of where to begin their compliance efforts. These organizations also seem to have a poor grasp of the reporting timelines. For example, many providers and hospital leaders think that MACRA will not affect them until 2019; however, as mentioned, the reporting period for payments in 2019 has already begun, so physician organizations should be paying attention to the implications of what they choose to report this year.
Practical Strategies for Launching or Advancing a MACRA Program
Regardless of where a physician organization is on its MACRA journey, there are key activities that can set the stage for success. Here is a brief look at a few of these tactics and some guidance on how to approach them.
Educate clinicians. Although MACRA has no direct impact on hospitals, physician organizations that bill services under Medicare Part B or that sponsor an accountable care organization (ACO) must be familiar with the regulations and ensure their physicians and other relevant clinicians are prepared to comply with them. Among clinicians of any type, there is a widespread lack of understanding of what MACRA means and how they should approach compliance, so physician organizations, as well as hospitals that partner with such organizations, may find it beneficial to educate their clinicians on the legislative and regulatory nuances.
Because MACRA applies to physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists, it is essential that any such clinicians in a physician organization be aware of their need to participate in MACRA efforts. Education also should demystify the two MACRA pathways (MIPS and APMs). This discussion should include what is involved with each one, as well as the timeline for reporting.
Although there are many ways to build clinician awareness, effective approaches include webinars, discussions at staff meetings, and presentations that include real-world examples. Professional association meetings also can provide MACRA breakout sessions that are focused and detailed, helping providers appreciate how MACRA will affect them.
In some instances, providers may need more in-depth support to understand reporting tools, requirements, and timing. Others will need support with more fundamental changes to their physician organizational culture and governance structures, deeper understanding of population health strategies, and optimization of care models, technology, and workflows to succeed in a value-based payment world.
With every educational offering, it is important to allow plenty of time for questions and interactive dialog. The more clinicians feel involved in the effort, the more likely they are to buy into the ultimate plan.
Assemble a MACRA strategy implementation team. Because MACRA touches a variety of areas, it is crucial to make sure the team leading the work represents multiple perspectives. This group should include clinicians, financial leaders, C-suite leaders, and IT specialists. By seeking diverse perspectives, a physician organization can generate a more realistic and executable strategy.
Overall, the team should analyze data, assess risk, gauge technological constraints, and solicit opinions from key stakeholders. Members of the group should be well respected among their peers to ensure the group’s recommendations and plans carry weight when presented to the organization. To ensure the group is successful, physician organizations should allow time for the team to meet regularly before, during, and after MACRA strategy implementation, particularly because the required organizational shifts must be refined in an iterative fashion.
Create a strategic plan for MACRA compliance. The more a physician organization has a defined yet flexible plan, the more it will be able to successfully realize full MACRA compliance. The strategic-implementation team should take ownership of creating the plan, asking critical questions along the way.
One of the first questions to answer is whether the physician organization will strive to pursue an advanced APM or will follow the MIPS pathway. As mentioned, most clinicians will participate in MIPS, but if physician organizations are already involved in Medicare APMs, such as accountable care organizations (ACOs) or bundled payment programs, they may qualify for or be ready to pursue participation in advanced APMs.
To determine eligibility, physician organizations must ascertain whether their adopted program meets the requirements for advanced status. Programs that meet these requirements in 2017 include Medicare Shared Savings Program (MSSP) Track 2 and 3 ACOs, the Next Generation ACO Model, the Comprehensive Primary Care Plus (CPC+) model, the Oncology Care Model (OCM) with two-sided risk, and the Comprehensive End-Stage Renal Disease Care Model (large dialisis organization [LDO] arrangement or non-LDO two-sided risk arrangement). In 2018, MSSP Track 1+ also will qualify. and certain commercial, Medicare Advantage, and Medicaid managed care contracts with sufficient risk could qualify in 2019. If a physician organization participates in any of these programs, it also must ensure it has the necessary revenue or patient thresholds to be considered “advanced.” If it does not, then the organization would be well advised to take steps to achieve those thresholds.
Physician organizations that do not qualify as advanced APM participants initially, but wish to, absolutely should conduct a financial analysis that examines their ability to take on risk and determines whether the costs involved with achieving advanced APM status are worth the financial bonuses now and in the future.
If a physician organization does not qualify as an APM, then it will automatically be paid under MIPS, and thus must establish a timeframe for reporting—which, for most providers, should begin as soon as possible. Because 2019 payments are based on how long data are reported in 2017, and actual performance has no bearing on the payment adjustment, there are no downsides to reporting—and there is the potential for a bonus if the physician organization reports for at least 90 days.
Organizations should determine early whether physicians will report individually or as a group, because that decision will lay the foundation for the rest of the effort. Both approaches pose challenges: Although reporting individually is a little more onerous, group reporting requires all clinicians to agree on measures and to be performing at a comparably high level, which may not initially be realistic for large clinician groups or multispecialty practices. When making the decision, groups should contemplate how specialist reporting differs from primary care reporting. If specialists report individually, they can submit the measures that are most relevant to their practices. Again, however, this effort can be resource-intensive.
Organizations also should give careful thought to which measures to report. To make this decision more manageable, physician organizations should focus on quality metrics first because these metrics represent 60 percent of payment in 2017. Clinicians must report six quality measures that best reflect their performance. At least one should be an outcome measure or a high-priority measure. An example would be the metric that demonstrates whether a patient’s diabetes is poorly controlled as indicated by a hemoglobin A1C result that is greater than 9 percent. CMS considers this both an intermediate outcome measure and a high-priority measure.
In addition to submitting outcome measures in the Quality category, physician organizations must submit one cross-cutting measure, meaning the metric is broadly applicable across clinical settings. Medication reconciliation post-discharge is an example. Clinicians also can choose to report a specialty measure set established by CMS, such as those related to cardiology or orthopedics, if appropriate.
When deciding on the quality measures to report, the organization can benefit from examining the metrics it submitted as part of the Physician Quality Reporting System (PQRS) program. Remember that MACRA incorporates many elements of PQRS, so this can be a good starting point. That said, if there are alternative measures that can better represent performance, then those measures should be considered as well. Clinicians and IT specialists who are part of the strategic team should weigh in heavily on these decisions given their firsthand knowledge of which initial metrics best reflect the organization’s performance and are easiest to report.
As part of developing the strategic plan, it is valuable to look beyond just what is necessary for MACRA compliance and identify whether value-based care can be advanced in other ways at the same time. For instance, becoming certified as a patient-centered medical home (PCMH) can further a physician organization’s work toward building the infrastructure, operating model, and culture for value-based payment while also meeting some of MACRA’s specific requirements. For physician organizations participating in MIPS, for example, becoming a PCMH can maximize their score for clinical practice improvement activities. Under the advanced APM pathway, practices that are certified as advanced PCMHs can qualify as an advanced APMs without having to put themselves financially at risk.
Examine the current reporting infrastructure. Before proceeding too far down the MACRA path, physician organizations should assess their existing reporting infrastructure and identify any potential weaknesses that could negatively affect the organization’s ability to reliably submit measures. It is important to check whether the facility’s electronic health record (EHR) is certified by the Office of the National Coordinator for Health IT. If it is not, the physician organization should consider how it will replace the system with one that meets meaningful-use requirements.
Next, physician organizations should review their current reporting capabilities across the board. For example, they should determine whether they can effectively collect and report measures that adequately reflect their performance and, if not, how best to obtain these reporting abilities. This reporting can be done through the EHR or another vehicle. For instance, a physician organization may want to submit data through a qualified registry, which is an outside entity such as a professional association or an ACO services company that collects clinical data from an eligible provider or PQRS group practice and submits that information to CMS on behalf of the participants.
The Time Is Now
Amid the turmoil that currently exists in health care, it may be tempting to delay work on MACRA. However, all indicators suggest that physician organizations will have to comply with the legislation—and the sooner they start, the better. By engaging in strategic discussions and data review, a physician organization can create a plan for MACRA compliance that will not only advance its value-based journey in Medicare fee-for-service, but also further propel it toward value-based care across all its lines of business.
Julian Harris, MD, MBA, is president of CareAllies.