By now, most of us have heard of accountable care organizations and bundled payment. But for many of you, the shift to value-based population health management or compensation based on performance hasn’t affected your practice.
You still get paid fee for service. You’ve seen “the next big thing” in health care come and go; you don’t have the capital or spare intellectual bandwidth to make the transformation to value-based care – and as many of you have told me, at the end of the day, you just want to see patients.
There are a lot of reasons to sit on the sidelines a while longer. I get it. But that indecision could result in the biggest decision of your career. But it won’t be your decision – it will be defaulted to others. Why?
Welcome to MACRA – the Medicare Access and CHIP Reauthorization Act. On April 16, 2015, President Obama signed sweeping legislation irrevocably moving the American health care system to value-based payment. The United States Senate and House – Republicans and Democrats – came together to replace the Sustainable Growth Rate formula (SGR) with MACRA.
MACRA represents the end of a long history of perpetually delayed Medicare physician fee schedule cuts that were to be automatically triggered under the punitive SGR formula absent Congress’ annual postponement ritual. After providing for a series of annual physician payment increases, MACRA’s reimbursement methodology transitions to a value-based model that includes two pathways: 1) the Alternative Payment Model (APM), and 2) the Merit-Based Incentive Payment System (MIPS).
APMs include organizations that are focused on providing high-quality and cost-effective care, while also taking on significant financial risk (for example, an ACO).
MACRA highly incentivizes provider participation in APMs. For example, APM participants will receive 5% bonus payments from 2019 to 2024, if they receive a certain percentage of their Medicare revenue through APMs. In addition, providers qualifying as APM participants are excluded from participating in the MIPS model and are subject only to their own quality standards.
Under the MIPS model, provider performance will be evaluated according to established performance standards and used to calculate an adjustment factor that will then determine a provider’s payment for the year.
The performance standards will include the following weighted categories: 1. quality, 2. resource use, 3. clinical practice improvement activities, and 4. meaningful use. Depending on their performance in these categories, providers will receive either a positive adjustment, no adjustment, or a negative adjustment.
In 2022, these adjustments will range from a 9% negative adjustment to a similar positive adjustment. MIPS will apply to all Medicare services and items provided on or after Jan. 1, 2019.
What does this mean to you?
You are going to be reimbursed as if you have embraced value-based population health management, whether you really do or not. The MIPS formula could deny you north of 9% of your payments. Conversely, if you decide to get into an ACO or something similar, you not only don’t get dinged, you receive a 5% bump in fee-for-service compensation and the chance for additional savings payments. Of course, you have to decide to actually engage and lead this care improvement from your medical home. A fake ACO that lets costs rise will be responsible for those increases.
Readers of this column know that the statistics are bearing out the fact that primary care–led ACOs are the best model. The whole premise has changed. Instead of paying for volume and expensive procedures for very sick people, it rewards value – that is the highest quality at the lowest costs – through things in primary care’s wheelhouse: prevention, wellness, care coordination, complex patient management, and medical home care transition management.
In fact, CMS has recognized this by making primary care subspecialties the only ones required to be in the Medicare ACO program and the Medicare Shared Savings Program (MSSP), and recently with its ACO Investment Model, which prioritized ACO advanced infrastructure payments to physician- or small hospital-led ACOs in rural areas.
There are more physician-owned ACOs today than any other kind. If you are part of another type of ACO, such as one driven by a health system or multispecialty practice, don’t despair. They can work, too. But you need to step up and make sure they do.
The price of passivity
MACRA’s shifting of the annual flow of $3 trillion from rewarding volume to rewarding value will, in this author’s estimation, have MACRA easily eclipse the Affordable Care Act in significance. Indecision will not stop your placement in the value-based payment system. Why not control your destiny to achieve your professional and financial goals as leaders of health care? Through indecision, you will be both unprepared and defaulted into the quality and efficiency compensation measurements of MIPS.
MACRA has changed everything. You’ve been asked to lead American health care and get paid to do it. This is not a hard question. Please feel free to contact me directly with questions or comments on how to prepare.
Mr. Bobbitt is a head of the Health Law Group at the Smith Anderson law firm in Raleigh, N.C. He is president of Value Health Partners, LLC, a health care strategic consulting company. He has years of experience assisting physicians form integrated delivery systems. He has spoken and written nationally to primary care physicians on the strategies and practicalities of forming or joining ACOs. This article is meant to be educational and does not constitute legal advice.