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MACRA: Health care transformation is picking up speed

A year and 11 days after President Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) into law, the US Centers for Medicare and Medicaid Services (CMS) released the first major regulation, setting forth the new rules under this game-changing law.

MACRA has been a bit of a sleeper issue, and although many are just waking up to realize the groundbreaking plan it has set in motion, it has been years in the making. MACRA is poised to drive payment and delivery reform across the payer mix for the foreseeable future. It doesn’t do Washington’s annual “kick the can down the road” on the “doc fix” that simply maintains Medicare payments to all physicians under an outdated payment system. MACRA is a transformative law that builds a new, fast-speed highway to take the health care system away from the fee-for-service system and toward new risk-bearing, coordinated care models.

Last week, CMS provided a comprehensive rundown of how new payment tracks will work and which current payment and delivery models are most likely to be counted as new advanced alternative payment models (APMs) under the law. But just as important, the proposed rule put a spotlight on the fact that clinicians have less than seven months to prepare for January 1, 2017 – the start of the first performance period under MACRA’s new payment tracks.1

The proposed rule on the Merit-Based Incentive Payment System (MIPS) and APM Incentive under the Medicare Physician Fee Schedule (PFS) could be one of the most eagerly anticipated health care regulations in recent memory. Since it was released on April 27, 2016, many health care stakeholders have been poring over its 962 pages and have been learning that this law has major implications for health systems and commercial health plans, too – not just clinicians paid under the PFS. The law will allow clinicians to develop new care models and may also motivate collaboration between plans and hospitals as it encourages organizations to enter into new payment and delivery models.

Much of the buzz on the proposed rule has been around CMS’ identification of which existing Medicare APMs are most likely to be considered Advanced APMs under MACRA – those that bear downside risk and achieve new quality standards. Clinicians who achieve certain revenue or patient count thresholds through such Advanced APMs can qualify for temporary bonuses for 2019 through 2024, and for higher payment updates beginning in 2026. Notably, only six current APMs made the Advanced APM list in the proposed rule, one of which is not available until 2018:

  • Next Generation Accountable Care Organization (ACO) Model (18 current participants)
  • Medicare Shared Savings Program (MSSP) Track 3 (16 current participants)
  • Comprehensive End-Stage Renal Disease (ESRD) Care (CEC) – Large Dialysis Organization (LDO) arrangement (12 current participants)
  • MSSP Track 2 (6 current participants)
  • Comprehensive Primary Care Plus (CPC+) (available in 2017)
  • Oncology Care Model (OCM) two-sided risk arrangement (available in 2018)

In this context, it’s not surprising that CMS expects to pay APM incentives to between 30,658 and 90,000 clinicians in 2019. This is in contrast to the 687,000-746,000 eligible clinicians whom the agency expects to receive payment adjustments through MIPS in 2019.

Although CMS expects the number of clinicians qualifying for APM incentives to increase over time, most clinicians will be on the MIPS track in the early years of the new payment tracks, which CMS is now collectively referring to as the Quality Payment Program (QPP). Clinicians will need to consider carefully assessing their current performance in the four categories that will comprise the MIPS score: quality, resource use, clinical performance improvement activities and advancing care information (a change in terminology from meaningful use of certified electronic health record technology). The resource use category could be a particular area of concern for many clinicians in light of its goal of reducing utilization for unnecessary or duplicative services and its reliance on medical coding. In order to perform well in this category, clinicians and health systems alike will need to improve their coding accuracy and adapt their care models accordingly.

Given the heated political debate over health care in Washington, DC in recent years, many stakeholders have been predisposed to taking a wait-and-see approach to many health care regulations. MACRA is different – it is the rare health care law that was passed with overwhelming bipartisan support and continues to enjoy strong support from Republicans and Democrats in Congress. This all but ensures its continued implementation, regardless of the outcome of the November elections.

MACRA is a game-changer. It was designed to disrupt our health care system at all levels. And it’s doing just that: MACRA is already creating strategic discussions around new care, payment, and delivery models. In this case – and especially given the tight deadline – it is time for all to hop on this fast moving highway.

PS. For more information on the proposed rule, see below and the Reg Pulse Blog post, “CMS releases comprehensive MACRA rules: New law poised to shape payment and delivery reform in the future.”

1Proposed Rule, Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, April 27, 2016

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Author bio

Anne Phelps is the US Health Care Regulatory Leader and a Principal with Deloitte & Touche LLP. She has over twenty-five years of health care policy experience having worked in federal agencies, the US Senate, the White House, and in consulting firms. She serves as a strategic business advisor to numerous health care stakeholders – including providers, health plans, employers, and life sciences companies – helping them navigate the complex health care regulatory environment and how it will impact their organizations.