Top 5 Strategies to Succeed Under MACRA

October 13, 2016
Mark Hefner

Before you know it, your reimbursement will be affected by MACRA. Here are five ways practices can prepare now.

If you've been following the news since the Medicare Access and CHIP Reauthorization Act (MACRA) proposed rule was released, you've likely seen a plethora of articles that are, in a word, scary. For ACO's, medical groups, and small practices slow to adapt to this change, there are good reasons to be concerned.  The proposed first reporting period begins Jan. 1, 2017 for the Merit-based Incentive Payment System (MIPS), which currently applies to more than 90 percent of eligible clinicians.  However, for those already moving in the right direction or proactively beginning to adopt the right strategies now, there is tremendous opportunity.  In addition to the positive payment adjustment, the top performing quartile will receive a 10 percent bonus and there is potential for up to an 18 percent additional bonus.  The spread in potential payment adjustments could therefore be as much as 26 percent in 2019, and 46 percent in 2022 and beyond.  

Many clinicians breathed a sigh of relief when CMS announced recently that they will allow physicians to pick their pace of participation for the first performance year.  In reality, those that avail themselves of the slower pace option now available will continue to fall further behind their peers, increasing the probability of maximum penalties in later years.  Risk is now unavoidable and the race to demonstrate improvements in the cost and quality of care is already underway.

Gaining a Competitive Edge

Under MIPS, eligible clinicians are now in a race against their peers.  Those that get off the starting block first and are able to maintain momentum will outperform those who wait.  The winning strategy is to increase focus on categories of the MIPS score that will differentiate high and low performers.  Based on the scoring criteria for Clinical Practice Improvement and Advancing Care Information, both are unlikely to be areas of strong differentiation compared to Quality and Cost/resource utilization.   

At 50 percent of the MIPS score in year one, it is reasonable to expect some initial differentiation in Quality, but scores will quickly become similar among top performers.  Cost is by far the most difficult to control and also the area that clinicians have the least experience with.  While MIPS, Alternative Payment Models (APMs), and Advanced APMs won't receive a cost score, their cost performance will directly drive their shared savings and at-risk revenue.  Clinicians that are able to get ahead of their peers in the cost category are likely to stay ahead, and will therefore become the strongest performers under MIPS.  They also will be the best prepared to succeed under APM models.

Top Five Priorities for Success

In order to optimize payments under Advanced APMs, MIPS, and APMs, eligible clinicians should focus their efforts on these five areas immediately:

1. Join a group or APM team and fully participate

Controlling cost and quality is a team sport with multiple providers collaborating.  Together, clinicians can pool resources to implement improved processes/technology and reporting, pool risk, and co-manage attributed patients.   Additionally, MIPS scores will be reported publically, either individually or as a group. If you "go it alone" and don't score well, it may be more difficult to join an APM later.  

2. Take control of downstream spend by coordinating referred care with high value referral partners

The average primary-care physician makes 1,000 referrals every year, thereby influencing ten million dollars in downstream healthcare spend, according to research in JAMA.  That means that a group of 100 primary care physicians influences one billion dollars of healthcare spend every year, and may have over 16,000 patients in the process of receiving care elsewhere at any given time.  On average, up to half of this spending may be on Medicare patients.  All of this begs the question - how can you successfully manage cost if you don't know where your patients are? 

The single most overlooked opportunity to control both cost and quality of care is the referral, because it is both the trigger point that money is about to be spent and an early indicator of a decline in health. Only by placing patients with the highest value provider and maintaining visibility into that patients care across the continuum can providers effectively manage both cost and quality. 

According to "Adopting Accountable Care: An Implementation Guide for Physician Practices," Engelberg Center for Health Care Reform at Brookings, developing a high value referral network is critical to success.  By coordinating referred care for their patients across the community, clinicians are able to maintain control of the downstream quality and cost of care, thereby maximizing their MIPS score and APM revenue.

3. Participate in Medicare's Chronic Care Management Program (CCM)

Engelberg also cites managing high risk patients as a key to success in accountable care.  According to CMS data, 93 percent of Medicare fee-for-service spend is on people with multiple chronic illnesses.  The importance of proactive and frequent care management of these poly-chronic patients cannot be overstated under MACRA.  An effective way to address these high risk patients is via the CMS CCM program (CPT 99490).  Through CCM, CMS is both subsidizing the necessary infrastructure and resource investments to be successful under MACRA and helping to fund preventive care management of the most costly segment of the population.  Take advantage of it. 

4. Prioritize technology investments based on ROI

Technology and process investments should be prioritized to support the most essential elements that deliver rapid ROI, as opposed to an "all or nothing" approach.  Your priorities will depend on your specific organization, but fully reporting your performance and getting control of your attributed costs need to be addressed.  To avoid unnecessary financial risk, beware of investing heavily in areas like population health management solutions and predictive analytics before you have enough lives under value-based contracts to realize ROI.  You may be able to start by leveraging clinicians to identify high risk patients, and leverage EHR data to identify the larger population of poly-chronic Medicare patients for engagement. 

5. Lead with value

Payer contracting is shifting rapidly in competitive markets from negotiations based on pricing power and network participation, to value-based contracts that reward outcomes.  In addition to succeeding under MACRA, groups that implement the strategies outlined above will have a competitive advantage with private payers.  By positioning yourselves as the leading value player in your market, you can win commercial contracts and gain further economies of scale.

While the final rule won't be known until late in the year, we know enough now to take action in the right direction.  Those that start sooner will have a first mover advantage that is hard to catch up to.  Those that delay may very well dig themselves a hole they can’t climb out of.  Regardless of how the final rule shakes out,  the strategies outlined above will prepare clinicians to be successful in the new world of risk-based payments.

 

Mark Hefner is CEO of Infina Connect Healthcare Systems, the leading provider of SaaS referral coordination solutions. Previously he led healthcare IT businesses for Allscripts, GE Healthcare and Hill-Rom. Mark holds a BS in Electrical Engineering and a MS in Management from Georgia Tech.