When the calendar flipped to 2017, it heralded a year that will be radically different from the one it preceded. One industry that will certainly experience some upheaval is healthcare. In fact, those changes began day one as the MACRA payment models took affect.
The goal for MACRA is to fundamentally change our country’s approach to healthcare and how we pay for that care. The Centers for Medicare & Medicaid Services (CMS) are abandoning payments based on the older sustainable growth rate (SGR) methodology.
There are now two different payment models. For physicians billing CMS on a traditional fee-for-services basis, CMS has created the Merit Based Incentive Payment (MIPS) structure that will reimburse physicians based on their performance for quality, cost, meaningful EMR use, and clinical practice improvement. For physicians participating in the CMS Innovation Programs, payments will be based on the Alternative Payment Model (APM). APM still considers quality, cost, and EMR use, but under APM physicians can receive higher bonuses for accepting risk.
“CMS is linking payments to performance using a ‘balanced scorecard’ approach. What that means is that physicians need to focus on quality but not by ignoring cost,” said Kirit Pandit, president and CTO of VitreosHealth. “By including cost and resource utilization in the mix, CMS has sent a signal to providers that the traditional reimbursement is on its way out.”
Many in the industry are apprehensive about the new MACRA regulations. According to a recent Advisory Board survey of the Medical Group Strategy Council, 70 percent of employed medical groups are concerned about MACRA implementation.
The survey found that only 50 percent of the medical groups expect to be ready to report data for the entirety of 2017, making them eligible for a positive payment adjustment. Another 21 percent say they will select the partial-year option, qualifying them for a smaller positive payment adjustment. The remaining respondents are planning to test the program and hope to report minimal data and avoid a negative payment adjustment.
Interestingly, while MACRA’s most immediate impact will be felt by providers, insurers will be affected, as well.
“Most payers take their lead from CMS,” said Pandit. “Commercial payers are feeling the same pains as CMS. We’re already seeing a move away from fee-for-service and reimbursing physicians in a manner similar to MIPS and APM. In addition, “Pay-viders,” who represent both payers and providers, are also interested in improving their medical loss ratio and will certainty follow the path set by CMS.”
As the impact of MACRA is felt across the entire healthcare industry, it is more important than ever that providers and payers fully understand their patient populations.
“The ability to predict which patients are likely to develop complications and those who will require early intervention is becoming an absolute necessity,” said Pandit. “Both providers and payers can utilize analytics, especially predictive analytics, to leverage information contained in individual claims, encounters, screenings, and public sources to predict events that impact cost and quality. However, they need to be careful about the tools they choose. Using large data sets at a national level tend to be mile-wide and inch-deep in their predictive and prescriptive capabilities. These tools do not capture the specific characteristics of a payer’s or provider’s population and risk characteristics.
“To be of value, analytics should enable broad horizontal, population-level views and deep vertical views, down to an individual patient’s claim or encounter.”
By identifying a patient’s impact to both cost and quality, and those most likely to change their behavior, analytics can help providers and payers achieve the goals of MACRA: improving care while lowering cost.
“That’s what we do at VitreosHealth,” said Pandit. “Vitreos analyzes patterns, movements and trends at a population level, and also identifies gaps and intervention plans at the individual patient level. With Vitreos, we are not making broad generalizations, such as ‘Let’s pull in all patients with A1c that’s 10 percent or greater’. Instead, the approach is very targeted, such as ‘Let’s pull in those patients where we can impact A1c for quality improvement, but can also impact cost and close these other 3 gaps that will improve other quality scores and reduce chances for avoidable ER visits.’ Vitreos will estimate each patient’s impact on cost and quality, and develop an individualized intervention plan by identifying the most important clinical and non-clinical risk factors.”