Payment Reform and MACRA: The World is Speeding Up

By July 30, 2016 August 26th, 2016 Uncategorized

Payment reform is much talked about, often written about and now becoming real in today’s world. The move to value-based reimbursements and other new business models is an inevitable reality that is dramatically reshaping the US healthcare system. In the Fee for Service model, providers were typically compensated for the volume: the number of patients seen and tests conducted; in the new world of value-based reimbursements they will increasingly be paid for successful outcomes, promoting healthy behaviors and the prevention of expensive episodes of care. As Richard Migliori, MD, Chief Medical Officer of United HealthGroup recently stated at an industry conference, In a Fee for Service world, the typical physician used to worry about who was in the waiting room. Now in the value-based world they have to worry about who is NOT in the waiting room. He went on to share that of United’s $100 billion in reimbursements, 43% have some tie to value today.

Now CMS is taking a leading role in the transformation, with the recently released MACRA (Medicare Access and CHIP Reauthorization Act of 2015) rule, designed to push quality measures tied to reimbursement incentives for Medicare providers. With the fastest growing segment of health insurance members belonging to government sponsored programs, including Medicare, Medicaid and Duals, CMS has publicly stated it is targeting 30% of all of its reimbursements to be value-based by 2019, with 50% by 2021 and 75% by 2023. The initial MACRA quality measures will start on January 1, 2017, with payments beginning in 2019. And the MACRA rule is written with specific intent of moving the model beyond Medicare into Medicaid, and ultimately into the commercial market over time.

Health plans are compelled to prepare for the change to value-based contracting and quality-based outcomes that MACRA will bring with it. Payors, particularly those with Medicare Lines of Business, must be ready to capture data related to the new quality and performance measures, beginning on January 1, 2017. Payors must have the ability to adjust the way services delivered are reimbursed under Medicare, and embrace the value-based models that MACRA is introducing and reinforcing. And to do so, payors need to leverage a technology infrastructure with the agility to move quickly in order to adjust their benefit and payment models.

Industry experts have been weighing in on MACRA through the recent comments period and in other public forums. A few examples are:

Deloitte: MACRA is poised to drive payment and delivery reform across the payer mix for the foreseeable future.

American Medical Association President Steven Stack: “Our initial review suggests that CMS has been listening to physicians’ concerns,” adding, “In particular, it appears that CMS has made significant improvements by recasting the EHR Meaningful Use program and by reducing quality reporting burdens.”

PwC: In many ways, MACRA genuinely reflects Medicare and Medicaid’s drive towards payments that are based on the quality of care physicians deliver rather than the quantity of procedures they perform.

Senator Debbie Stabenow, Democrat from Michigan: MACRA is a truly historic piece of legislation.

 

In June, a select group of health plan executives and other healthcare leaders gathered for an industry roundtable, sponsored by HealthEdge and Deloitte, for a discussion and to share their perspectives on MACRA.

Executives attending the roundtable considered many aspects of the anticipated changes, including:

  • How quickly the government’s push for pay for performance could truly extend beyond Medicare, into Medicaid and commercial plans and the resulting changes to payer-provider networks and contracts
  • The need for process changes and improved efficiency in how a population is identified and treated, particularly those in at-risk categories.
  • The urgency for health plan IT organizations to have a detailed understanding of the agility and flexibility required to handle changes to provider payments based on performance. Participants stressed that this is a key ingredient for system success that will translate to the financial health of the plan.
  • The ability for a health plan to consider members strategically and with a long-term view, particularly by establishing quality results for younger members and those with lower risk, to create a membership base with high loyalty for the future.
  • The potential impact the law will have on smaller and rural practices. Virtual groups of providers will be facilitated by CMS, along with $20 million of funding, all designed to aid providers of all sizes to participate in the Advanced Payment Model program
  • How the inclination for health plans to narrow provider networks to work with highly rated physicians must be balanced with proper access to healthcare services.
  • The consensus that much of healthcare is local and community based, and MACRA could encourage opportunities to strengthen those relationships in places where the linkage is already strong.
  • The realization that those providers and provider entities that are in denial (I.e. some IDNs) are in for a shock.

With the January 1, 2017 start of the first quality measurement period fast approaching, MACRA promises to be a significant force in how payment reform is accelerated, beginning with Medicare and expanding to all forms of health insurance in the future.

 

About the Author

3bf5dd8Harry Merkin, Vice President, Product Marketing, HealthEdge

Harry Merkin has worked with both payers and providers through many dynamic changes in healthcare for a number of years. He is currently responsible for Product Marketing at HealthEdge and previously had similar responsibilities at Evariant and NaviNet. Merkin has collaborated with many transformative entities across the healthcare landscape. He has helped introduce and promote enterprise software solutions that enable payers to improve their competitive effectiveness, as well as perform valuable communications between payers and providers, and allow providers to effectively collaborate with patients and consumers as well as with each other. Merkin is the parent of two Millennials and is a long-time New England Patriots season ticket holder.