Editor’s Note: Mark Hefner is CEO of Infina Connect Healthcare Systems, the leading provider of SaaS referral coordination solutions. Previously he led healthcare IT businesses for Allscripts, GE Healthcare and Hill-Rom.
Providers of Medicare Part B services must stand up and take note: The way they are paid for Medicare is about to change drastically. The Medicare Access and CHIP Reauthorization Act of 2015 was passed to replace the flawed Medicare Sustainable Growth Rate. When the final rule is released later this year, eligible clinicians may have only a few months to prepare for the effects of this sweeping legislation.
MACRA—which links the majority of fee-for-service payments to value and quality—establishes two payment tracks: Advanced Alternative Payment Models (APM’s) and the Merit-Based Incentive Payment System (MIPS). Very few organizations will qualify as Advanced APM’s, leaving the majority of eligible clinicians subject to MIPS.
Under MIPS, eligible clinicians will be scored and ranked against each other nationally, and these rankings will determine payment bonuses and penalties. Scores are based on quality, resource utilization (cost), advancing care information, and clinical practice improvement as follows.
· Quality is 50% of score in 2017 and drops to 30% in 2019
· Cost (resource utilization) is 10% of score in 2017 and increases to 30% in 2019
· Advancing Clinical Information is 25% of score
· Clinical Practice Improvement is 15% of score
Eligible clinicians subject to MIPS should start preparing now in order to ensure they are not subject to negative payment adjustments and can instead capitalize on the strong bonus potential. The best strategy is to focus on the two areas of the MIPS score that will most differentiate high and low performers as the program evolves: quality and cost. Quality is more heavily weighted in the first few years and is expected to be a differentiator among the middle and bottom tier performers. Cost is much more difficult to control, and it is expected to be the most highly differentiating category. APMs subject to MIPS and Advanced APMs are not scored on cost under MIPS since their shared savings and at-risk revenue already rewards or penalizes them on cost. Providers that are able to control cost will be the best prepared to succeed.
Top three priorities for MACRA success
In order to optimize payments under MIPS, APMs subject to MIPS and Advanced APMs, eligible clinicians should focus immediately on these actionable areas for improving quality and cost:
1. Join an APM team and fully participate
Not surprisingly, solo practitioners and smaller clinics are projected to be the hardest hit by negative payment adjustments. Controlling cost and quality is a team sport across multiple providers, not just your practice. By coming together, clinicians can pool risk, pool resources to implement improved processes and technology and participate in co-management agreements that will help to improve care coordination for all attributed patients.
Additionally, eligible clinician scores will be reported publically, either individually or as a group. If clinicians “go it alone” and don’t score well, it may become very difficult to join an APM. The basic economics at play here suggest that joining an APM is a good strategy. And every APM should prepare to take on risk before it is needed.
2. Take control of downstream spend by coordinating referred care with high-value referral partners
The average primary care physician makes 1,000 referrals every year, thereby influencing ten million dollars in downstream healthcare spend.* That means that a group of 100 primary care physicians influences one billion dollars of healthcare spend every year and may have over 16,000 patients in the process of receiving care elsewhere at any given time.
On average, up to half of this spending may be on Medicare patients. Improving clinical and financial outcomes extends beyond the practice to proactively monitoring the status of referred patients and coordinating their care across the community.
The single most overlooked opportunity to control both cost and quality is the referral, because it is both the trigger point that money is about to be spent and an early indicator of a decline in health. Only by placing patients with the highest value provider and maintaining visibility into that patients care across the continuum can providers effectively manage both cost and quality.
According to “Adopting Accountable Care: An Implementation Guide for Physician Practices”, Engelberg Center for Health Care Reform at Brookings, developing a high value referral network is critical to success. Closed-loop referral management allows clinicians to refer within their high value referral network, make sure referrals are appropriate and complete so diagnosis and treatment are expedited, coordinate and collaborate with other providers within that network and maintain visibility into the status of patients while they are being cared for by others.
By coordinating referred care for their patients across the community, clinicians are able to maintain control of the downstream quality and cost of care, thereby maximizing their MIPS score and/or APM revenue.
3. Participate in Medicare’s Chronic Care Management Program
Engelberg also cites managing high-risk patients as a key to success in accountable care. Given that 93% of Medicare fee-for-service spend is on people with multiple chronic illnesses**, the importance of proactive and frequent care management of poly-chronic patients cannot be overstated under MACRA.
An effective way to address these high risk patients is via the CMS CCM program (CPT 99490), which provides monthly non-face-to-face clinical support between office visits for patients with two or more chronic conditions. Through CCM, CMS is both subsidizing the necessary infrastructure and resource investments to be successful under MACRA and helping to fund preventive care management of the most costly segment of the population. Take advantage of it.
While the final rule won’t be known until late in the year, we know enough now to take action in the right direction. Those that do will have a much higher probability of avoiding penalties. And those that start sooner will also have a first-mover advantage that is hard to catch up to. Regardless of how the final rule shakes out and whether or not the start of the performance period is delayed, the strategies outlined above will prepare clinicians to be successful in the new world of risk-based payments.