MACRA's Biggest Hurdles for 2017 and Beyond

December 12, 2016

Seven areas of MACRA where practices will likely struggle in the coming years, with advice from experts on how to deal with each one.

The general consensus among analysts and consultants is that with the final rule for the Medicare and CHIP Reauthorization Act (MACRA), the Centers for Medicare & Medicaid Services (CMS) took a step in the right direction by easing and lengthening the runway into the program. Providers need only report one measure for a minimum 90-day period to avoid a penalty for 2017. If nothing else, the move indicated that CMS heard the concerns voiced by physicians and health systems about the proposed rule. 

Nevertheless, the overall complexity of the shift to value-based payment over the next few years will leave many physician practices with difficult or confusing decisions about how to approach the Merit-based Incentive Payment System (MIPS). The pathway combines the Physician Quality Reporting System, Meaningful Use, and Value-Based Payment Modifier into one program. MIPS’ four components are Quality, Resource Use, Clinical Practice Improvement Activities, and Advancing Care Information. The program is designed to allow physicians to choose the measures most meaningful to their practice.

Physicians also must look ahead at Advanced Alternative Payment Models (APMs), such as Comprehensive Primary Care Plus, which offer 5 percent bonuses and streamlined quality reporting, but also require practices to take on downside risk and upfront infrastructure costs.

Physicians Practice asked several experts to describe what they think will be the greatest challenges for practices as they enter MACRA territory in 2017.

MIPS or Advanced APMs?

CMS has given practices an option of doing very minimal levels of reporting to avoid a penalty for 2017. Martie Ross, a principal in the Kansas City office of consulting firm, Pershing Yoakley & Associates (PYA), says that by far the easiest way to check the box for 2017 is to report one clinical practice improvement activity. "You should fire your practice manager if he or she can't figure out how to get you full points on Advancing Care Information and Clinical Quality Improvement Activity," she says.

But Ross added that practices should ask themselves the following question: Does it make sense for us to simply check the box in 2017, then focus our energies on more long-term strategies? For example, CMS promises to open up enrollment in Advanced APMs significantly for 2018 reporting. "You could develop lots of infrastructure to do quality reporting for MIPS or you could spend time evaluating Advanced APM options for your practice," she says. "If you think you are in a position to do well by these MIPS metrics, and you can identify the right measures and earn a bonus, then it is definitely worth the effort. But if it is a matter of positioning your organization more broadly for value-based reimbursement, I don't know that just dotting the i’s and crossing the t's on MIPS is going to get you there."

Choosing the Right Quality Measures

For physicians going the MIPS route, quality measures make up 60 percent of the score in the first year. Many practices are faced with the challenge of selecting the quality measures they believe are most reflective of their services. "As simple as this may sound, an underlying consideration in measure selection should be the practice's ability to achieve top performance in that area," says Thomas Flynn, a principal performance partner for Premier Inc., a national healthcare improvement company. As with acute-care quality measures, easier measures will "top out" quickly, causing fierce competition to achieve performance in the top 10 percent, he explains.

"The trick with quality is that everything is relative," says PYA's Ross. "You have to compare yourself to historical benchmarks, which are going to be high because they are based on folks who have been reporting [through PQRS]. We have a pretty large percentage of physicians who have not done any reporting yet. They will have to look at the benchmarks for particular measure where they think they can do a good job."

Which MIPS measures will be most challenging for smaller practices to address? That is going to vary from practice to practice, says Bryan Smith, principal performance partner for Premier. It depends on the practice type and whether or not they feel that there is a sufficient MIPS measure or whether there is a Qualified Clinical Data Registry available that has custom measures that meet their practice needs. Smaller practices or those that have not invested as heavily in technology infrastructure will have a difficult time reporting, Smith adds. Provide will need to devote time in the coming months to shoring up those data capture and reporting capabilities.

Patient Engagement

In the Advancing Care Information segment of MIPS, which replaces Meaningful Use, the patient engagement aspect will continue to be challenging, predicts physician Sarah Woolsey, medical director of HealthInsight Utah, a private, nonprofit, community-based organization dedicated to improving health and healthcare. She suggested that practices make patient portals a priority in working with their EHR vendors. She also extolled the “OpenNotes” initiative, which shares clinicians’ notes with patients with the goal of greater patient communication and involvement in their care.

Resource Utilization/Cost Measures

Another challenge Woolsey sees for physician groups is gaining an understanding of resource utilization/cost and how to impact it. Based on claims data, this category will compare resources used to treat similar care episodes and clinical condition groups across practices.

 For the first performance year of MIPS, a provider's Resource Use score will not factor into the overall MIPS composite score. The weight for this category will increase in future years, however, to 10 percent in 2020, based on 2018 performance, and 30 percent for payment year 2021 and beyond.

"For primary-care physicians, actually very little of the total cost of taking care of patients occurs in their office," Woolsey says. "It is the relationships, the referrals, and the other places patients get care. So for primary-care physicians, understanding how to maximize their relationship with their patients and partners in their medical neighborhood is a new challenge. How do they learn to be more efficient in that part of their care?"

The fact that CMS delayed the Resource Use/Cost scoring aspect of MIPS for a year is a good thing, Woolsey says. "Providers should use that time as an opportunity, just as we did with ICD-10 for [an additional] year, to really understand what we are doing, so when it starts people are more savvy and aware. Anything that gets delayed by CMS is an indication we should pay some attention to it because it is likely to be a challenge."

Understanding the New Regime

In order to do well on MIPS over several years, you have to score well in as many performance categories as possible, says Tom Lee, founder and CEO of Chicago-based consulting firm, SA Ignite. He says it is important to remember that every single point in MIPS translates into dollars up or down. "That is in marked contrast to existing programs where it is an all-or-nothing proposition," he says. In existing programs, once you are just over a threshold, you score the same as someone who is massively over the threshold. "In MIPS, that goes away," he says. "Every single point counts, which fuels the movement toward continuous improvement."

Another challenge, Lee says, is that the payment adjustment for a given score only occurs two years after you earn the score. For instance, if you earn a 78 out of 100 in 2017, that will lead to a payment adjustment in 2019. "You don't find out the 2017 score until the third quarter of 2018, nine months after 2017 is already over," he says. "Three months after that you are staring down the barrel of a potential penalty."

Amy Nguyen Howell, chief medical officer at CAPG, an association that represents physician organizations practicing capitated, coordinated care, says its members are well positioned for MACRA because they have been executing the capitated model already. Nevertheless, she says, it will be challenging for everyone, well positioned or not, to figure out how to streamline their quality reporting for public and private health plans. "Physician groups may contract with 10 to 12 health plans between commercial, Medicare, Medicare Advantage and Medicaid," she says. Practices will need to overlay these quality measures to align with all these product lines and payers, she adds. “We try to alert our members to the measures that are common to all of them. It took me hours to go through the 2,400-page document of the final MACRA rule to cross-walk these measures with NCQA (National Committee for Quality Assurance) NQF (National Quality Forum), and with ACO measures. That will be a resounding challenge."

Your MIPS Score Follows You Around Like a Shadow

The MIPS scoring also will have an impact on the ongoing consolidation trend in healthcare. One implication for providers is that as they go through the years of MIPS, they will be carrying around two MIPS scores, one from the previous year and one from two years ago. "Even if you join a whole new organization, they are going to ask you what your MIPS scores were the last two years, because the new organization is going to inherit the payment adjustment for the next two years," Lee explained. This could make your practice less attractive and will impact how they contract with you.

Large health systems are looking at this as a strategic opportunity. If they have a track record of helping their providers get very high MIPS scores, they can contact small practices that aren't doing well and offer to help them improve. "Contracting and network formation and credentialing of providers are going to be strongly impacted by this," Lee says. "Small practices will be particularly vulnerable to this if they are not thinking about how the score is going to be used, not just for them but also perhaps against them."

Nudging Physicians Toward Advanced APMs

The MACRA regulation set increases in Medicare Part B reimbursement at a rate that will likely be below inflation in many years. This dynamic, notes Premier's Smith, coupled with the potential penalties associated with MIPS, will continue to push providers into new payment models. It will be critical to understand the impact of moving toward these models, both in terms of initial investment in technology and care managers, as well as the long-term potential for gains if successful in the models, he says.

The financial incentives may not be strong enough. Depending on the physician's specialty, payer mix, and the available Advanced APMs, the 5 percent bonus may not cover the infrastructure cost to build or join an Advanced APM, Smith says. "It will certainly be less than the maximum risk they face under the Advanced APM. As a result, many providers will want to partner with organizations that can spread the infrastructure costs and absorb or mitigate some of the risk."