In April 2015, Congress eliminated the SGR (Sustainable Growth Rate) — the formula used to calculate Medicare payments to healthcare providers. In its vacancy came the newly proposed Quality Payment Program and MACRA (Medicare Access and CHIP Reauthorization Act of 2015). MACRA will impact almost every provider nationwide and two new methods of reimbursement emerged:

  • The Merit-Based Incentive Payment System (MIPS)
  • Alternate Payment Models (APMs).

What you need to know about Macra

You don’t have time to study the 2,398-page MACRA ruling. We’ll cut right to the chase. Performance measuring began on January 1, 2017. Providers who were ready began submitting data to influence payment adjustments this year in 2019.

If you participate in MIPS, you will earn payments based on performance. Your payment will be influenced by evidence of best-practice quality data. Ranking will be based on quality, improvement activities, advancing care, and cost. The idea is to focus on what’s best for the patient. You can view the advanced APMs here.

If you participate in APMs you might enjoy added incentives for providing high-quality and cost-efficient care. APM’s can apply to a specified condition, or to a specific population. The intended outcome is rewarding risk-taking related to patient outcomes.

Why the big change?

Whether or not you agree that Medicare was fine the way it was, we can all agree we’ve gotten used to it. So why pull the rug out from everyone? The goal of MACRA is pitched as a way to incentivize for better quality, lower-cost, and patient-centric care. The target was set to have 50% of Medicare payments made through APMs, and 90% of the remaining pay-per-service payments tied to quality and value by the end of last year, 2018.

Is your revenue at risk?

One of the most criticized effects of the MACRA/Quality Payment Program was that eligible clinicians needed to participate in MIPS in 2017. Those at risk of severe penalty this year will continue to grow – participation is not optional.

Since 2003, Congress has kept Medicare payments, for the most part, stable. The SGR formula worked at the beginning of its lifetime to get more providers paid for service until health care costs increased. Then, providers got the short end of the stick. While some think the repeal of SGR will provide a more secure environment for physicians to expand and flourish, some argue providers will simply refuse to take Medicare patients.

Elderly workers will be forced to pay a greater share of Medicare premiums as a result of more providers dropping out. This isn’t the sort of “Patient-first” result that’s intended at the core message of MACRA.

Growing concerns among practitioners

The major fears and concerns about MACRA aren’t entirely irrational. It all sounds good on paper, but it’s a one-size-fits-all experimental solution. There’s going to have to be some flexibility. As it is initially understood, large healthcare providers will benefit from quality scores, and smaller practices may struggle with “above nominal risk”. The amount of reporting necessary to remain compliant with MACRA standards won’t be hard for larger practices and groups, therefore, they will likely be the only ones to enjoy financial gains.

Focus on patient care will be distracted by the increased administrative work, looming penalties, and immeasurable performance indicators. This will also drive doctors away from smaller practices to bigger networks, increasing the demand for quality credential verification organizations.

Data trail first, patients second

Many healthcare providers got into the industry for one reason: To provide healthcare to patients (as the name would imply). They didn’t get into business to report and create a data trail for the government. All the time spent doing that takes away from the already limited time they get to spend with patients. The goal of MACRA is spelled out as providing better care to patients, by incentivizing quality.

That’s all well and good, but the benchmarks at which quality is measured are hinged on the ability to report and document the quality. In other words, you could provide better care than your competitor, but if they document it better they will receive a payment and you will receive a penalty.

Overall, the step towards making sure quality providers get paid is one in the right direction. However, the vaguely spelled-out experimental payment models and less-than-data-driven “quality” measurements will attempt to measure the immeasurable. Smaller practices will struggle to avoid penalties, and will likely not enjoy the incentives that larger networks that can group report will benefit from. More conservative health care providers will likely drop out of Medicare altogether, leaving the burden (and the bill) on elderly patients.

To learn more about MIPS and MACRA, see our brochure here.