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Can MACRA promote greater synergy across Medicaid and Medicare APMs to transform care?

Recent legislative efforts to repeal and replace the Affordable Care Act (ACA) pushed Medicaid reform into the center of the health policy spotlight. However, while Congress was debating coverage expansion and federal financing, some states have been quietly implementing their own delivery reform in an effort to reward value-based care. Many Republican and Democratic governors alike have embraced alternative payment models (APMs) such as medical homes, accountable care organizations (ACOs), and bundled payments to help improve the efficiency of their Medicaid programs. The goals of many Medicaid APMs are in line with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and delivery reform efforts in the commercial market. But are there ways to find synergies across these programs and make it easier for providers to transform care?

State flexibility and innovation
The federal Medicaid statute gives states broad discretion to design and administer their programs in a way that meets the unique needs of their population. Since taking office earlier this year, US Department of Health and Human Services (HHS) Secretary Tom Price, along with Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma, have emphasized state flexibility and encouraged governors to apply for Medicaid section 1115 demonstration waivers to improve their programs.

Medicaid APMs range from narrow interventions that target patients with specific health conditions or in a particular geographic area to state-wide initiatives that encompass nearly all the Medicaid population. Many states are leveraging their managed care contracts to promote value-based care; some states have taken advantage of the ACA’s new State Plan option to create Medicaid Health Homes; others have utilized 1115 waivers to finance their initiatives; and more than half of states received funding from the Center for Medicare and Medicaid Innovation (CMMI)’s Innovation Models initiative to implement multi-payer health care payment and delivery reform.

Creating synergy across multiple-payers
For many clinicians and heath care organizations, Medicaid only represents a fraction of their total revenue and the financial incentives of Medicaid APMs may be insufficient to radically alter care delivery. By aligning with Medicare and commercial payers – either through multi-payer initiatives or by synchronizing quality metrics and reporting requirements – states and Medicaid managed care organizations may be able to get more bang for their buck.

It’s been eight months since MACRA went into effect, and it is already altering the Medicare payment landscape. It also creates new opportunities for Medicaid managed care companies and states to help their networks of providers perform well and leverage Medicare financial incentives to support their own value-based care efforts.

Until 2018, the only way clinicians can qualify as Advanced APMs is through the Medicare Shared Savings Program ACOs and the Comprehensive Primary Care Plus initiative. Beginning in 2019, clinicians who participate in Medicare APMs – but do not see enough patients or receive enough payment though those models – will be able to count their patients in APMs with other payers (e.g. Medicaid) toward qualifying for the Advanced APM track. This is the all-payer combination option. These clinicians are exempt from MIPS reporting requirements, can earn an annual lump-sum bonus though 2024, and higher annual-fee schedule updates, compared to MIPS participants.

Stakeholders need to act quickly to take full advantage of MACRA “all-payer combination option”
On June 20, CMS released a proposed rule outlining how the agency intends to implement key provisions of the MACRA’s Advanced APM track, including the “all-payer combination” option. Under the proposal, either clinicians or payers can submit information about APMs to CMS to determine whether the model meets the Other Payer Advanced APM requirements. Only states can submit Medicaid models for consideration, which means that managed care organizations will need to work closely with the Medicaid agencies. While the performance year for the all-payer combination doesn’t begin until January 2019, the deadline for payer-initiated submissions is next spring, just a few months away.

So while the national debate over the ACA continues, we continue to focus on MACRA implementation. There are opportunities for providers to move toward APMs across Medicaid, Medicare, and commercial payers. These opportunities together could provide the financial incentive to reform and improve care delivery.

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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.