Several months ago, I blogged about the impact that the Medicare Access and Chip Reauthorization Act (MACRA) will have to hasten the demise of fee for service due to the necessity to change both the care and business models of healthcare organizations to succeed.
Due to the understandable confusion regarding how MACRA works, the following is a brief roadmap for what your organization will need to do to prepare for a payment methodology that will place 5 percent-8 percent of your Medicare Part B (physician payment) at risk within the next year and a half.
- You must act now as the 2019 payment methodology will be based upon 2017 performance data. Most organizations have not implemented the necessary changes required to optimize reimbursement under the advanced alternative payment models (APMs) or the merit-based incentive payment system (MIPS) and both require fundamental elements that include: physician engagement/alignment, standardization of both care and delivery processes, a health information management infrastructure that supports the collection, collation, and reporting of both quality and cost data to all care providers, managers, leaders and payers, and clinical/business analytics that supports real time reporting of key performance indicators.
- You must pursue either the APMs or MIPS. Although many organizations create accountable care organizations, patient-centered medical homes or some form of bundled payment through acute care episode programs, the vast majority of physicians (who do not participate in these models) will be subject to MIPS by default.
- APMs will place at risk up to 5 percent of Medicare Part B payments based upon: conformance to pre-determined quality and cost metrics, shared savings and contractual lump sum payment incentives based upon pre-determined contractual targets.
- MIPS is a consolidation of the Physician Quality Reporting Program, value-based payment modifier and Medicare Electronic Records Incentive Program that will initially place at risk up to 8 percent of Medicare Part B payments in 2019 that will increase rapidly to 18 percent at risk by 2022. The only physicians who will not participate include those in APMs, during their first year participating in Medicare Part B, and those in low volume practices who bill less than $10,000/year to Medicare and care for less than 100 Medicare beneficiaries/year. Either individual physicians/practitioners or groups (under a tax ID number or TIN) will participate
- MIPS performance categories include: quality (50 percent weight), resource use (10 percent weight), clinical practice improvement activities (15 percent weight) and advancing care information (25 percent weight).
Quality will include six total measures including: one cross-cutting measure (multidisciplinary) and one outcome measure that will be emphasized. Population measures will be automatically calculated using the Medicare Hierarchical Condition Categories for population health.
Resource utilization will be based upon claims cost data benchmarked against aggregate Medicare claims.
Clinical practice improvement activities includes a clinical improvement project selected from 90 proposed activities with additional credit given for additional projects.
Advancing Care Information will include the following areas that physicians and practitioners may choose from: security for protected health information, electronic prescribing (now required), patient electronic access (e.g. patient portals), coordination of care and patient engagement, health information exchange to permit interoperability, and public health/clinical data registry reporting. Scores will be derived through a pro-rated (as opposed to ‘all or nothing’) approach that takes into consideration optimal care outcomes.
- The four dimensions will be combined into a MIPS Performance Composite Score that will determine the final Medicare Part B payment adjustment. The initial proposal is that average benchmark performance will result in no change in payment whereas 25 percent above or below benchmark performance will determine maximum positive or negative payment variance with incremental scores prorated accordingly. There will be an additional 10 percent bonus payment for individuals or group that earns top decile performance that will be subsidized by those in the bottom decile range.
- Participation in either APMs or MIPS will require a: qualified clinical data registry, electronic healthcare record, and both administrative and clinical claims.
Conclusion: MACRA represents a significant change in how physicians and other healthcare practitioners will be paid under Medicare Part B and will accelerate the alignment of physician/practitioner practices with healthcare organizations that can provide the operational infrastructure necessary to participate effectively. In addition, there will be a growing divide between high and low performers and how they are reimbursed as Medicare moves away from volume to value. Medicare will clearly differentiate high, middle and low performers in a way that will optimize both reimbursement and market share for high performers. It will also drive lower performers further from narrow network contracts that both employers and commercial payers will utilize to differentiate performers in the new highly differentiated value stream that will represent the healthcare system of tomorrow.
Jon Burroughs, M.D., is president and CEO of The Burroughs Healthcare Consulting Network, Inc.