How Physicians Can Prepare for the Financial Impact of MACRA

Financial impact of MACRAThe Medicare Access and CHIP Reauthorization Act (MACRA) proposed rule has already generated enough pain to warrant its own ICD-10 diagnosis code. This was bound to happen with a comprehensive and complex, 962-page document that redefines the core of how physicians and other healthcare professionals (now all referred to as Eligible Clinicians or ECs) will be reimbursed. MACRA is easily the most profound change to the payment program in the last 60 years. Because this is such a drastic shift, it is going to alter the way that care is delivered and the way that ECs practice.

Given all the concerns around the proposed rule, here are some highlights to keep in mind, as well as five key areas of concern for providers and what can be done to address them.

MACRA Highlights

MACRA will consist of two payment structures, Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APM). The American Medical Association provides excellent resources that summarize and answer questions about both structures, as does CMS, which published a Quality Payment Program fact sheet with well-illustrated details on the new payment models. Also, Bobbi Brown, Vice President of Financial Engagement at Health Catalyst, wrote about The 7 Best Ways to Prepare for MACRA Today.

ACOs, patient-centered medical homes, and bundled payment models will all qualify under the APM structure. The majority of providers, those who practice outside of these models, will default to the MIPS structure. MIPS will not apply to hospitals or facilities.

There will be MIPS exemptions:

  • Physicians newly enrolled in the Medicare program
  • Physicians with less than or equal to $10,000 in Medicare charges AND less than or equal to 100 Medicare patients annually
  • Physicians who are already involved in an advanced APM through their hospital systems

The CMS proposal is that, eventually, almost all providers will be reimbursed through these mechanisms rather than a fee-for-service arrangement, although the latter will be retained.

The Financial Impact of MACRA

To begin with, the fee schedule for all providers will adjust upward by 0.5 percent annually from now through 2019.

Physicians aligned with certain APM structures will assume a certain amount of penalty risk. To encourage participation, the APM track will provide 5 percent bonus payments every year from 2019 to 2024 to providers joining new models. Physicians under this structure will only need to adhere to the quality reporting requirements of the APM and will be exempt from the MIPS quality program.

MIPS providers who score well will receive annual bonuses of 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent for 2022 and beyond. On the flip side, physicians who don’t meet all requirements will face penalties of those same amounts for those years.

Five Key Points that Demand Attention

  1. Smaller practices will feel the biggest pinch.

CMS, in designing these programs, anticipated winners and losers. The reimbursement scores center around quality, advancing care information, clinical practice improvement activities, and resource use. The metrics for these categories will zero in on providers focused on population health and coordinated care, so they will be the ones that experience significant positive adjustments in their reimbursement rates. The medical home model, which includes primary care providers and patients empaneled across the continuum of care, will qualify as an advanced APM. Thus, the specialties that interact closely with primary care in providing services for heart disease, diabetes, or other chronic diseases, are also going to benefit the most from this thanks to the already-established coordination. Unfortunately, small and rural practices, as well as those that practice preventive maintenance, such as chiropractors, dentists, optometrists, and behavioral health providers stand to lose the most because they tend to operate in isolation.

Given this, it stands to reason that many physicians in smaller practices will seek employment with hospitals and large independent physician groups, or affiliate with hospitals via joint ventures.

  1. Issues such as care coordination and shared decision making will need to be worked into the normal practice workflow in order to fully benefit from, or at least not get penalized under, MACRA.

We’ve been very paternalistic in medicine. As physicians, we make diagnoses, tell patients what to do, write prescriptions, and tell them we’ll see them in three months. Under the new models, the physician will be just one part of the care team. The proposed rule will move beyond this style of care and provide for community partnerships in helping to care for patients.

Patients will need to be an integral part of their care and really understand the care plan. This is where care coordination and shared decision making will come into play. In addition to the physician, the team may include a nurse, a pharmacist, and a social worker who are all managing a group of patients with chronic conditions to make sure their needs are being met, such as arranging transportation, solving prescription problems, planning meals and exercise…this will be the additional support that a healthcare team will now provide.

  1. Meaningful Use (MU) will not disappear, but will morph into a different program encompassed by MIPS.  

CMS Acting Administrator, Andy Slavitt, said that “the Meaningful Use program as it has existed, will now be effectively over and replaced with something better.” Make no mistake that the provisions of MU will still be in effect. Under MACRA, it will change from focusing on EMR use into an expanded usage of electronic health systems to interact with patients and give them more access to their information.

The old paradigm basically required an EMR and a method for prescribing electronically. These were the rote standards, but the category of Advancing Care Information, which will account for 25 percent of the MIPS score in the first year, will delve much deeper. It will transform the complexity and focus of meaningful use in terms of how electronic access is going to help, rather than just providing a check-off box to show that a practice did something. Advancing care information will require using an EMR for tracking patient performance and improving care coordination.

It has been difficult for physicians to comprehend the absolute benefits of EMRs. We have never been able to exchange information and have a truly interoperable system, sometimes even within the same institution.

Patients are far more mobile now, moving between facilities and between providers. Interoperability is the buzzword for having access to patient information across all systems. After all, patients are no longer limited to seeing a single doctor in a single facility. Care will have to be more comprehensive and global in nature. The practice of having a single EMR confined within the walls of a single institution or clinic is no longer acceptable.

Providers will still need to protect medical records from outside intrusion. HIPAA remains intact. Electronic prescribing will still be a focus. But the bigger issue will be on sharing health information across a broader spectrum of care provider networks and settings.

  1. MACRA will impact not only physicians and traditional primary care providers, such as nurse practitioners and physician assistants, but others, including physical therapists, nurse midwives, and clinical psychologists.

Chiropractors, dentists, and optometrists will be affected by the proposed rule, as will nurse practitioners, physician assistants, clinical psychologists and social workers, physical and occupational therapists, speech-language pathologists, audiologists, dietitians, nutritionists, and nurse midwives. These are professionals who we don’t normally associate with these types of programs, but CMS rules and regulations don’t stop with Medicare; they are also concerned with Medicaid patients. Some of the programs pioneered by MACRA will leap into the private insurance market as well, so there will be issues that need to be addressed by all healthcare providers, not just physicians.

  1. Preparation will be paramount.

To track all of the metrics and participate in this new program successfully will require considerable ramp up time, which means physicians will need to get very proactive. We’ve had a lot of experience at Health Catalyst in getting services up and running at many hospitals and practices. So we know that, even though improvements can be realized sooner, it takes a good six months to put a solid process in place and to have enough data to show that a new program is doing well. And this is for larger facilities with abundant resources. Likewise, with all of the provisions related to MIPS and APMs, practices, especially smaller ones, will need to be very prepared in order to show meaningful outcomes.

More “MACRA-economics”

The MACRA rule brings much more transparency to healthcare than ever before. It will accelerate a lot of changes, where we will move from just treating acute illnesses after they occur toward a public health type of practice in the U.S. There will be a reduction in the way dollars are currently spent with all the rescue care that we do. We can’t afford to increase healthcare spending; it’s already a $3 trillion industry. There will be more cost savings involved as we reduce waste and minimize errors, the latter through the patient safety issues that are being promoted through MACRA.

Right now we are independent practices siloed by affiliation, practice, payment mechanisms, and geography. MACRA will provide some hope on the interoperability frontier. It will take some steps toward actually developing a system of care.

MACRA will reduce the amount of mandatory regulatory reporting by streamlining the reporting process for small practices that don’t have the wherewithal of larger systems. CMS will be using claims-based data to track some of the measures and simplify the reporting. And physicians will be able to choose which programs they are part of, so their reporting requirements will be aligned with that choice. There will generally be much more control of what gets reported through this program.

Smooth Sailing or Stormy Seas: Early Adoption Is Key

I have never seen any government program deploy in a smooth fashion. There are a lot numbers being tossed around. You will get points toward earning 100 percent of the 30 percent scoring of one thing that’s going to comprise 50 percent of some other thing. There will be some stormy seas and we may temporarily lose the compass. Most providers won’t proactively research this until it’s absolutely necessary. To participate successfully in MACRA, requires proactive preparation. One good resource is the webinar I participated in, titled, Making Sense of the New MACRA Announcement. Besides the CMS, AMA, and ACP websites, good resources are also available from specialty-specific and payer websites.

Once MACRA is upon us, there will undoubtedly be a great deal of frustration, and probably some anger, about how to navigate in the new MACRA environment, unless clinicians and their practices are well prepared. This will be the most profound transformation of Medicare reimbursement, possibly for decades to come, so it will literally pay to get out in front of it.

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