As part of the Centers for Medicare and Medicaid Services’ Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), providers will need to begin reporting quality measures through participation in either the Merit-Based Incentive Payment System (MIPS) or Alternative Payment Models (APMs), or surrender a percentage of their Medicare earnings for not participating.
In April, CMS issued a final rule to implement MACRA, which includes programs with changes to the Medicare fee-for-service reimbursement. This policy, scheduled to begin payments in 2019, is rooted in significant quality-driven incentives that will push value and pave the way for value-based programs beyond Medicare.
The most important part of MACRA eliminates the Sustainable Growth Rate (SGR) formula and corresponding planned cuts that had been in effect for nearly two decades. SGR was created in 1997 to “control costs” through a combination of complex math formulas and economics to determine whether or not physician payments should go up or down. In layman’s terms, SGR meant that “if the expenditures per Medicare beneficiary exceeded the ‘target’ expenditures, then a ‘conversion factor’ would be used to decrease payments to physicians.” Despite its unpopularity, SGR was considered by most to be better than the old “rule” in which providers were compensated based on volume of visits.
Part of this program change includes an overhaul of some of CMS’ key quality programs into a single performance/value-based program called Merit-based Incentive Payment System (MIPS) and a growing carrot or stick incentive of plus or minus 4 percent in 2019, rising to plus or minus 9 percent in 2022. The nuances of this program are still under development, as quality measures are still being defined and selected for inclusion, and additional program rules are sure to follow.
There is concern about the severe impact this will have on individual and small group practice providers. Physicians will have to make some big decisions that will have major impacts on their bottom line.
Improving quality and preparing for value and performance based incentives will require an “all in” mentality that permeates every level of the organization. The best way to “move the people” is to show them the data and drive toward success. If you are not doing this yet, it’s not too late to start.
As physician groups advance into MACRA, they will need to select one of three options that will impact their fee-for service reimbursement (essentially, “to-participate, or not-to-participate,” followed by “to-perform, or not-to-perform”) which include:
- Participate in a qualifying Alternative Payment Model, such as an ACO, and potentially receive a 5 percent increase to their reimbursement based on performance.
- Participate in the Merit-based Incentive Payment System and receive a neutral, upward or downward adjustment to their reimbursement of plus or minus 4 percent, depending on quality performance, resource use, electronic health records and clinical practice improvement activities (still in definition phase).
- Choose not to participate in either option and automatically be subject to a reimbursement cut beginning with 4 percent and an expectation that this amount will grow in coming years
Reimbursement adjustments only impact services reimbursed under the Medicare Physician Fee Schedule (administration payments, imaging, etc.), and some key parts of care such as drug reimbursement will be unchanged.
Given the looming changes associated with MACRA, providers should be very concerned as many do not have the infrastructure in place to support the shift to value-based reimbursements. For those in larger practices, the following key considerations for implementation will help providers build out an infrastructure to support quality processes and outcomes reporting.
- Establish a clear quality “North Star.” Establish overarching practice quality goals, and ensure each department creates tactics that align with those goals. In order to truly understand what you are targeting, look at other organizations deemed “high performers” and set targets that will stretch your staff and teams to be “the best.” For example, it is not enough to diagnose asthma, you must also ensure that you are following the clinical guidelines to drive toward improved outcomes of patients by minimizing exacerbations and connecting them with a specialist who can keep their condition controlled.
- Adopt a commitment to quality that starts at the top and extends throughout your entire organization. Leveraging data will help to establish processes within each department that can provide measurable quality outcomes. For example, arm your front line staff with surveys to provide patients when they walk through the door and “listen” when they speak about how you can improve their experience. Or, establish metrics within your lab that push your organization to truly drive toward improved quality outcomes. Then implement new quality measures based on this data, and establish benchmarks in which to measure improvements within your organization.
- Leverage data to drive your organization’s understanding of performance. Set meaningful priorities, and maintain transparency about performance across the organization. For example, if your Emergency Department is unaware of how they are performing on door-to-balloon time, they are not able to make adjustments to processes that can improve the rates, and, ultimately, improve patient outcomes. For health plans, it is critical that your provider network knows how they are performing in areas such as HEDIS measures, and feel engaged in achieving top results.
- Assess performance gaps. Continuously evaluating where you are missing the mark in performance is critical in order to make the right adjustments. If your provider network is struggling with diabetes management, it will be critical to dig deeper into who seems to be struggling and specifically reach out them with information and practices that might help them to improve.
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