The Race to MACRA and Value

November 14, 2016

Is your practice ready for the new Medicare payment systems coming in January 2017? Now is the time to develop a plan.

The 2016 Physicians Practice Physicians Compensation Survey shows that few doctors are being compensated for value-based care. Of 812 responding physicians, 67.6 percent say none of their compensation is tied to value-based care, and another 16 percent say it's less than 1 to 5 percent. Moreover, a clear majority or 72 percent say none of their compensation is tied to patient satisfaction metrics.

That will change, whether physicians like it or not. Medicare's new value-based reimbursement program is slated to begin in January 2017, with payment adjustments set to take place in 2019. CMS released its final ruling concerning the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) in mid-October 2016, which will compensate physicians for quality-based metrics and patient outcomes under the Merit-based Incentive Payment System (MIPS) or the Advanced Alternative Payment Model (APM) pathways. Yet, many industry experts say that a good number of physicians are not even sure what MACRA is, let alone willing to accept the paradigm shift that it requires.

Susanne Madden, founder and CEO of The Verden Group, a practice management consulting firm based in Nyack, N.Y., says physicians just don't understand the push to embrace value-based care. "When we talk about value, it's sort of 'value for who?'" she says. "Payers understand value because they are trying to get quality and outcomes for the amount of money that is being spent on healthcare. Physicians don't see it in the same way."

While it is easy to speak about bringing value, controlling cost, and improving quality of care for populations of patients, physicians are more intimately concerned with caring for each patient individually. This can set up an adversarial relationship with policy makers, economists, and even payers who are looking at healthcare more in terms of dollars and cents.

"The value is very cognitive, for most physicians, because it is about the relationship with the patient," says Madden. "So we are really talking about two radically different things from the perspective of each of the key players in this … [Physicians] are very physical, very tangible, not very economically focused and driven in the way that payers are," she says.

Why are physicians resistant to value-based care?

In our survey, only 30 percent of respondents say they expect their compensation will be lower in 2019 because of the changes that MACRA will bring, and 60 percent say they are not sure how MACRA will affect their practice revenue. While the government has essentially eliminated the negative payment adjustment in the first year that Medicare uses its new compensation formula (as long as physicians report a small amount of data in 2017), that will not be the case in subsequent years.

Ellis "Mac" Knight, senior vice president and chief medical officer for Coker Group, a consulting firm based in Alpharetta, Ga., says physician resistance to MACRA may stem from an intrinsic view of medicine and patient care that is still firmly rooted in a fee-for-service (FFS) model. During the many years that Knight was a practicing internist and hospitalist, he says he foresaw "changes coming down the pike" stemming from healthcare reform and the movement to value-based reimbursement.

In his last role with Palmetto Health system in Columbia, S.C., he helped develop a Clinically Integrated Network (CIN) composed of the health system and roughly 600 community physicians, because he says he believed that the current system was not providing high-value care for patients or positioning physicians to thrive in a value-based environment. He admits that his position is not popular with the majority of physicians because, "Most physicians are so close to and so accustomed to practicing in a [FSS] environment, that they can't really see the perversities, if you will, that this payment model has caused," he says. "All healthcare providers, I would have to say, are fairly myopic in terms of their vision of the industry as a whole. They see themselves very interested in quality, they see themselves as very cost efficient, and they really don't see the broader picture that those two things aren't really true." 

What does MACRA mean for small, independent practices?

The value-based payment programs created under MACRA are designed to be budget neutral, meaning there is essentially a fixed pot of money for Medicare reimbursements beginning in 2019. In other words, if some physicians receive bonus money, others will receive a negative payment adjustment. According to the Quality Payment Program Overview Fact Sheet released by CMS, if a physician decides to participate in MIPS, then he will see either a positive, neutral, or negative payment adjustment of up to 4 percent of his Medicare payments (based on 2017 performance) in 2019, depending on the amount of quality-based data he provides.

There are exceptions to this provision: if a provider has fewer than 100 Medicare patients, or bills less than or equal to $30,000 in Medicare charges, then he is exempt from participation in MIPS.

Due to physician concerns during the final rule comment period, CMS has provided for a "transition year" starting Jan. 1, 2017, that eases reporting requirements and allows physicians to "pick their pace of participation." For instance, if a physician simply desires to avoid a negative payment adjustment in year one, she can start collecting performance data by Oct. 2, 2017 and submit a minimal amount of data to Medicare by March 31, 2018 - e.g., one quality measure or one improvement activity.

However, the reporting requirements will increase in year two, so doing the bare minimum is simply kicking the can down the road. Madden suggests that physicians use the transition year to familiarize themselves with new reporting requirements and quality metrics. "Don't wait, because you can take baby steps, January through October, and then test it out and see what that looks like for you in terms of monitoring your care and reporting on some of these categories," she says.

KrisEmily McCrory, is an employed, family-medicine physician based in Schenectady, N.Y. As a board member for her state chapter of the American Academy of Family Physicians, she also advocates for physician political activism especially when it comes to concerns over changing government regulations and practice conditions for physicians and their patients. She has expressed grave concerns about the challenges and burdens that MACRA will place on smaller physician practices.

After Medicare makes the first payments under MIPS, McCrory asks, "How many people are going to drop Medicare at that very moment? That, I think, is going to be very telling. You are going to find out in 2018 if you are going to have a negative payment adjustment. And if you are going to have a negative adjustment, is it worth taking Medicare patients anymore? We are not going to know that unintended consequence until we get through the first year."

Small practices have fewer resources than larger groups - staff, technology, and financial reserves - to help them address new reporting measures and needed changes to clinical work flows to support participation with MIPS, says Knight. If practices do try to go it alone, he says, they must first ask themselves, "What type of IT infrastructure am I going to need? What data systems am I going to need to report all these performance metrics? What billing systems am I going to need to put that into place, or get someone to outsource for me, so that I can get adequately reimbursed for value-based care?"

What specific steps should practices take to prepare for MACRA?

Many physicians are already participating in federal programs that are now part of MIPS; they've just been given new names. The EHR Incentive Program, or Meaningful Use, has been renamed the Advancing Care Information performance category under MIPS, which counts for 25 percent of the category weight in 2017. Most physicians will need to fulfill five measures in this category for at least 90 days (if they have chosen to report data for a full year in 2017): security risk analysis, e-prescribing, provide patient access, send summary of care, and request/accept summary of care.     

"If practices, particularly independent practices, have already started doing Meaningful Use, if they've already started taking steps to become a certified Patient-Centered Medical Home (PCMH), they're in the best shape," says McCrory. "People who have somehow managed to not get an EHR are in really tough shape."

Another consideration is the requirement that physicians must use an approved EHR that has been certified in 2014 for first year MIPS reporting, which could necessitate a significant investment in funds to upgrade or replace old technology. Madden says now is the time for practices to assess their current technology and ask if it is capable of reporting the data and quality measures required for MIPS. If not, practices should not wait on making new IT investments. It can take up to six months to thoroughly research, vet, and choose a new EHR system, she says.

Practices that are currently - or have taken steps to gain accreditation as - a PCMH are in a much better position in terms of demonstrating quality measures for MIPS, says McCrory. They are also more at home using technology for reporting purposes. "Participants in certified Patient-Centered Medical Homes, comparable specialty practices, or an APM designated as a medical home model, will automatically earn full credit" for the new Improvement Activities performance category, according to CMS. For practices that are not medical homes, Madden recommends they focus their energy on learning about Improvement Activities so that they can familiarize themselves with the new category, since it counts for 15 percent of the category weight in 2017.

The Physician Quality Reporting System (PQRS) program has been replaced by the Quality performance category under MIPS, which accounts for 60 percent of the category weight in 2017. When it comes to quality, "most Medicare providers have been reporting through Medicare's (PQRS)," says Madden. "They are fairly familiar with what the quality measures are and how they need to report on them." McCrory recommends that practices review the PQRS report from 2014 (the 2015 report will come out soon) so that they are aware how well they are doing on quality measures like patient HbA1Cs, compared to national standards.   

The final performance category, Cost, replaces the Value-Based Modifier and will not be counted into the final score for MIPS until 2018. For this measure, practices will not be required to submit data. It will be calculated from adjudicated claims data.

What are some other actions physicians can take?

Aside from becoming employed or dropping Medicare altogether, a third option for physicians is to join forces with other practices via Accountable Care Organizations (ACOs) or a CIN, says Knight. These types of structures can allow practices to operate independently, yet still benefit from economies of scale when it comes to administration, reporting, technology, contracting, and billing.

A strong advantage of joining a CIN is that the organization is already structured to focus on improving quality of care and decreasing cost via measuring outcomes and using them in data driven process improvement.

These value-based tenets will prepare physicians for participation in MIPS or APMs, according to Knight. "The roll out of MACRA is going to hasten … the interest of most independent providers to either become employed or to band together under APMs like CINs or ACOs, and offload or at least share the responsibility for this reporting burden and these change activities with a larger entity," he says.

"At the end of the day, you can run but you can't hide," Knight declares. "I think [physicians] are going to have to face up to the fact that a lot of what we do is waste and inefficient, and not necessarily value add … This is the whole purpose that CMS is trying to drive, [doctors] can look at their practice patterns and say, 'What can we do to reliably deliver measureable, high-quality outcomes, and do that in the most cost-efficient manner possible?'"

Erica Spreyis associate editor for Physicians Practice. She can be reached at editor@physicianspractice.com.