Healthcare Providers Face Game-Changing Shift with MACRA

While almost any business would leap at the chance to increase revenue by 4 percent or avoid an equivalent revenue loss, in the healthcare provider payments landscape, such outcomes can be held in the balance by confusing new legislation. Despite increasing cost pressures and tighter private payer margins, many providers are not taking the steps necessary to prepare for a current high-impact shift caused by the Medicare Access and CHIP Reauthorization Act of 2015 (more commonly known as MACRA).

A June 2017 survey conducted by KPMG-AMA shows only 51 percent of healthcare providers self-report as “somewhat knowledgeable” about MACRA, and less than one in ten physicians (8 percent) report themselves as “deeply knowledgeable” about the Quality Payment Program (QPP) and its requirements, which MACRA introduces. The balance of those surveyed (41 percent) said they had heard of QPP but would not consider themselves knowledgeable. Further, across the board, the majority of providers did not claim to fully understand the financial ramifications of the program.

MACRA replaces Sustainable Growth Rate reimbursement formula

MACRA legislation was passed in 2015 to replace the Sustainable Growth Rate reimbursement formula and to consolidate, align and simplify several disparate Centers for Medicare and Medicaid Services (CMS) pay-for-performance programs. While MACRA aims to improve and simplify the payment program, any change can be challenging at the outset. Healthcare providers running a practice under MACRA will need to understand and adopt the new requirements if they want to survive and thrive.

Key game-changing elements of MACRA

  • The program is a zero-sum game with reimbursement winners and losers (those losing will largely be the source of revenue for the winners)
  • The game stakes will increase annually through payment-year 2022 – the total gain/loss can be as high as +/-9 percent from 2017 rates
  • Inaction / failure to “get in the game” ensures that you will be a loser
  • The program creates public, clinician-identifiable performance measures

For healthcare providers, just as risky as revenue impact, is reputation. Clinician-identifiable performance measures, even for those choosing to ignore MACRA, will be posted for public consumption on the CMS Physician Compare website. This information will be available for reuse at no fee to third-party physician-performance-rating agencies. With healthcare consumers becoming increasingly responsible for a larger share of healthcare costs, and online resources for provider selection growing, providers should assume that public reputation will become an even greater factor in the provider-selection equation.

Finally, while some aspects may be deferred, as we’ve seen in the CY (calendar year) 2018 MACRA QPP Final Rule, it is not going to be legislated out of existence. MACRA passed with overwhelming bipartisan support – 92 of 100 senators voted for MACRA, and it passed in the House by a margin of 392 to 37. Furthermore, the 2018 Final Rule continues to provide strong evidence that CMS is committed to the principle of value-based reimbursement for the foreseeable future.

So, what is the minimal “must-do” activity in 2017 to avoid reimbursement reductions in 2019?

  1. Submit a single Quality Measure on one patient or a single Improvement Activity by March 31, 2018. There is no minimum period over which data needs to be collected to avoid an automatic 4 percent reduction in payment rates for non-participation. While, financially, this option merely avoids a rate reduction, it does also initiate steps to prepare for the 2018 data collection period.

What activity can result in the best reimbursement outcome?

  1. If you have prepared by collecting data for a continuous 90-day period, submit measures across the Quality, Advancing Care Information (previously “Meaningful Use”) and Improvement At worst, the benefit of this option is a neutral (0 percent) payment adjustment and at best a 4 percent increase in reimbursement rates. It also provides insight into how you stack up against peers in an increasingly competitive Medicare marketplace.

For more information about MACRA and its impact on providers, contact Edward Koller.