MACRA payment reforms: The journey is long, but the start date is fast approaching

Posted by Anne Phelps, principal, US Health Care Regulatory Leader, Deloitte & Touche LLP

As we move into the second half of 2016, preparing for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) may take up a lot more time than even the most forward-thinking health care stakeholders expected when they first started to learn about this new law. And for those who have continued to think of MACRA as “just the Doc Fix”–well, the lift might be even heavier.

Beyond repealing the sustainable growth rate (SGR) formula, MACRA sets payment updates to the Medicare physician fee schedule for all years in the future and offers significant financial incentives for physicians and other clinicians to move growing percentages of their practices to risk-bearing, coordinated care models, or what CMS is now calling Advanced Alternative Payment Models (APMs). For those who don’t go the Advanced APM route, their Medicare payment updates will be more closely tied than ever before to their individual quality outcomes and the cost of care provided to their patients. This new approach to Medicare reimbursement is called the Merit-based Incentive Payment System, or MIPS.

Stakeholders who clued into MACRA early on had taken some comfort in the fact that the first payment updates under MIPS or Advanced APMs wouldn’t take effect until 2019–“Plenty of time to deal with this later.” And who could blame them—looking at the law’s long implementation timeline over 10 years, a slow steady approach certainly seemed reasonable.

But when CMS released a 900+ page proposed rule on the new payment tracks on April 27, 2016, the regulators threw some cold water that woke up the health care community: CMS proposed kicking off the first performance period under the new law on January 1, 2017, less than seven months from when the proposed rule was published in the Federal Register and less than six months from where we are today. No one can afford to push off MACRA any longer.

As health care stakeholders have started to work their way through the proposed rule with their attention focused on January 1, 2017, it has become abundantly clear that MACRA is a transformative law poised to drive payment and delivery reforms for clinicians and health systems across Medicare and other government and commercial payers. In addition to significant new performance measures, reporting requirements and compliance exercises, MACRA sets up major strategic decisions for physicians and other clinicians in how they organize themselves and how quickly they move into coordinated care arrangements. Similar decisions await health systems and health plans that employ those health care professionals or rely on them for patient referrals and to build their networks. And while the law directly impacts Medicare payments through the Physician Fee Schedule, it lays the groundwork and provides strong incentives for other payers to move in the same direction, thus potentially disrupting the health care system at all levels.

With little time and a complex new law, starting work on a MACRA preparedness strategy can be a daunting task. But there are some critical first steps that virtually every health system and physician organization should take. Some specific actions to consider include:

  • Evaluate what processes are in place at your organization to keep tabs on new regulations–how will you stay aware of a shifting payment landscape and how will you educate and prepare your physicians and clinicians to adapt?
  • Understand how your physicians and other clinicians are organized both from a clinical and a tax identification number (TIN) perspective. How clinicians are grouped will have major implications for care models, reporting options, and payment updates under the new system.
  • Assess the systems and protocols you have in place to help your physicians and other clinicians deliver consistently high-quality, low-cost care. You can model financial scenarios to assess impact to your bottom line. Whether in MIPS or moving toward Advanced APM models—your financial success in the future will likely hang on this more closely than ever before.

The payment and delivery reforms under MACRA are poised to drive change over the next several years. But the time to start is now.

Read more about how MACRA is disrupting the health care system at every level.

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