Few things are certain in this time of transition for the health care system, as eight years of the Obama Administration come to a close and President-elect Donald Trump prepares to take office. However, as stakeholders from around the country gathered in Washington, DC for the recent National MACRA MIPS/APM Summit, there was general consensus that value-based care and alternative payment models are bipartisan issues and are here to stay.
Before the main summit kicked off, Deloitte hosted a pre-conference session for participants across the industry – health care providers, health plans, life sciences, and government leaders – to learn the basics of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and dive deeper into the components of the law, its disruptive impact on the industry, and strategic implications for the different sectors.
Why is MACRA disruptive? MACRA replaces the Sustainable Growth Rate (SGR) formula for payments under the Medicare Physician Fee Schedule (PFS) with fixed annual payment updates for all years in the future, and creates two paths for payment updates under the Medicare Physician Fee Schedule: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). For clinicians and health systems around the country, the time to act is now. The first performance period for payment adjustments under MIPS/APMs starts January 1, 2017 – less than 30 days away – for payment updates in 2019.
MACRA is designed to drive down medical costs by changing how the payment and care delivery system for clinicians, providers, and health plans operates. And despite its name, MACRA is poised to drive increased participation in risk-bearing coordinated care models across all payers, not just Medicare.
MACRA is a strategic and performance law rather than a compliance law. To be successful, it will not be enough for organizations to check the boxes to comply with the law. Instead, they will likely need to make a number of strategic decisions – including around how quickly to pursue value-based payment arrangements; strategies around care coordination and referral patterns; provider network strategies; and decisions on investments around technology, data capabilities, and other resources – to name a few.
Under the SGR, every clinician paid under the PFS received the same update regardless of performance. Now, clinicians payed under the PFS are going to be paid based on their individual performance. This requires more transparency on outcomes than ever before. Under MIPS, clinicians will be assessed as a group based on every clinician who is part of their tax identification number (TIN). Some providers may reorganize their business to be under certain TINs while others will likely remain in separate organizations. The public reporting requirements may lead to some health plans and consumers demanding high performers in contracts and networks.
Despite the disruptive changes in store under MACRA, a Deloitte survey published this summer found that awareness among physicians is low: 50 percent of surveyed physicians said they had never heard of the law, and 32 percent recognized it by name but were not familiar with its requirements. Of note, eight-in-ten said they prefer traditional fee-for-service (FFS) or salary-based compensation as opposed to value-based payment models, some of which qualify under the Act’s APM track, and 74 percent believe that performance reporting is burdensome.
A poll during the Deloitte session showed that session attendees believed that MACRA would disrupt virtually every aspect of their business – financial, clinical care, operating, and technology systems. With all these changes, will consumers notice? While it’s too early to tell how consumers will react, session facilitators pointed out during the discussion that MACRA’s name itself is designed to increase patient access: the “A” stands for access. Through improved care coordination, potential expansion of new services such as telehealth, workflow redesign, and increased emphasis on prevention, patients may see the benefits as MACRA is rolled out over the coming years.
The session facilitators left the audience with four next steps to consider as they look to 2017 and beyond:
• Begin internal discussions with key enterprise stakeholders: With awareness levels low, it is important for organizations to bring all stakeholders, including the board of directors, up to speed on the strategic implications and potential impacts of MACRA.
• Perform a thorough impact assessment: To understand how MACRA will impact strategic, financial, clinical, technological, operational, and organizational priorities, organizations will likely need to consider the potential impact of MACRA as well as explore strategies to gain access to higher percentage of the premium dollar.
• Plan and prepare for tactical changes and/or enhancements associated with MIPS readiness: The performance range for MIPS begins January 1, 2017, and organizations should be preparing for how they can best meet the performance requirements.
• Make informed, strategic choices around Advanced APMs and Other Payer Advanced APMs: Organizations that want to qualify for APMs likely need to move swiftly and strategically to make sure they are set up to take on the risk required.
Participants had the opportunity to discuss what their industry’s top priorities may be given the hastening timeline, and how relationships may change among the different stakeholders as MACRA progresses. While a range of opinions and answers led to a rich discussion, there was general consensus around two issues: Most agreed that MACRA will accelerate the health care system’s shift to value-based care; and for providers, not acting in 2017 is not an option.