The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) determines only Medicare Part B payment, but hospitals and health systems will be affected through their employed and affiliated physicians. So those organizations are working to help their physicians succeed under the payment system, which will mean moving as quickly as possible to advanced alternative payment models (APMs). (“Health Systems Brace for MACRA,” HFMA Weekly, May 5, 2017)
But how quickly? The Obama administration approved a “soft launch” for 2017 to allow physicians and hospitals time to get things in order to understand, implement and meet quality-reporting requirements. Now, some healthcare industry advisers expect the current administration to relax 2018 quality-reporting requirements under Medicare’s new physician payment system.
The expectation of further concessions on the implementation of MACRA in 2015 stems from projections that 90 percent of the more than 700,000 affected physicians will start out in the Merit-based Incentive Payment System (MIPS) track. If physicians don’t meet the intensive quality-data collection, reporting and performance requirements under MIPS, they face cuts that accelerate to potentially 9 percent of their total annual Part B payments. (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)
Initially, 90 percent of physicians are expected to not meet the criteria for qualifying APM participation and instead to default into MIPS.
One large health system executive said that the organization is looking at how to move its clinicians out of MIPS into APMs and identifying the competencies needed to support them. Other health systems are initiating multiyear efforts to push many of their employed and affiliated physicians into advanced APMs. (“Health Systems Brace for MACRA,” HFMA Weekly, May 5, 2017)
At the World Health Care Congress last week, a former healthcare advisor for the White House urged physicians to evaluate their quality performance, “then think of ways to optimize their activity within the fee structure to gain revenue while building in the needed quality infrastructure.” Such infrastructure can carry a high price tag—an average startup cost of between $5 million and $25 million for an accountable care organization (ACO) with 15,000 to 25,000 enrollees. (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)
The administration has asked for industry input on reducing MACRA reporting requirements while maintaining the core approach to continue the momentum in the shift to value-based payment.
A large health system has decided to proceed under the assumption that there will not be an extension of the 2017 “soft launch” of MACRA. It will use the time to “get better” rather than “stall what we really need to do.” (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)
Its preparation includes:
- Weekly meetings with various stakeholders
- Ongoing physician and administration education
- MACRA oversight committees that include senior leadership
The Healthcare Financial Management Association noted, “ . . . the talk of slowing MACRA implementation comes amid widespread industry agreement that it is likely to spawn greater healthcare consolidation, including acquisitions of many—if not all—small practices.” (“Some Expect a Second Year of MACRA ‘Flexibility,’ HFMA Weekly, May 5, 2017)
It could be the swan song of the private-practice physician because of needed, and expensive, infrastructure to answer and report all the things these physicians need to report to get paid. Some expect the percentage of employed physicians will increase from less that half to more than 80 percent over the next 10 years as a result.
iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.
Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards.
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