A Few Thoughts on the Final MACRA Rule, Risk Adjustment and Value-based Care

Dean Stephens
October 20, 2016

On October 14, the Centers for Medicare & Medicaid Services (CMS) released the final MACRA rule that physicians had been fearfully waiting on pins and needles for. It’s nearly 2,400 pages long – though CMS acting director Andy Slavitt was quick to point out that the comments and feedback section takes up about 80 percent of the document. CMS also unveiled a new, simpler website with fact sheets and other resources designed to help physicians understand and prepare for the changes.

The final rule implements the new Quality Payment Program and changes the way the more than 600,000 Medicare providers are paid. With a focus on rewarding higher quality care, the rule offers two payment models, the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM), to help providers shift from fee for service to value-based reimbursement models. For providers who are ready, the Quality Payment Program begins on January 1, 2017. CMS is allowing those who aren’t ready to start anytime between January 1 and October 2, 2017. No matter the start date, performance data must be sent in by March 31, 2018.

Here are some initial thoughts on the final rule and the changes it will bring:

  1. CMS listened to provider concerns. It would be an understatement to say that MACRA as initially proposed was pretty unpopular. Critics contended it would do far more harm than good, particularly to small, independent practices. Some feared it would push physicians out of providing Medicare services entirely. CMS asked for and received a flood of comments and feedback on the proposed rule, and the early consensus is that the final rule did a good job of taking stakeholder concerns into account. Providers can now transition into the program at their own pace and have increased flexibility and more participation options. The final rule streamlined the MIPS reporting requirements to ease the burden on clinicians, reducing the number of measures in the Advancing Care Information performance category (formerly Meaningful Use) from 11 to five. This will free up providers’ time so they can spend it with patients, and not on paperwork. In a nod to the very real concerns of small practices, CMS has made it easier and less costly for them to participate, excluded more practices and set aside $20 million a year for five years to help support and train physicians in practices with 15 or fewer doctors. All told, the adjustments are a smart way to help providers comply and ease into what’s going to be a massive – but necessary – change that will take many years to completely unfold.

  2. Risk adjustment is going to play a big(ger) role. Risk adjustment is the key mechanism for ensuring providers are reimbursed for the actual cost of care. Under both MACRA payment tracks it’s important for physicians to perform risk adjustment accurately, but the stakes go up in the higher risk, higher reward Advanced APMs. CMS currently estimates that 70,000 to 120,000 clinicians will participate in an Advanced APM, and the changes in the final rule make it clear that CMS is laying the groundwork for increased participation. For example, the final rule makes it easier for smaller practices to opt into the Advanced track and CMS says it is looking at providing even more pathways to participation over the years, including a new, lower risk Advanced APM called ACO Track 1+. The focus now is on allowing providers to move at their own pace and get more experience with the program, but don’t be surprised if, in the near future, CMS more strongly pushes providers to take on more risk by moving into an Advanced models.

  3. Data analytics is vital to success. Under MACRA, reimbursements are determined by quality of care rather than the number of patients seen. To succeed in the new environment, providers are going to need more data to help them understand the true health of their patient population so they can provide higher quality care, measure their performance relative to their peers, and ensure they are reimbursed for the actual cost of care. Accurate risk adjusted coding in particular is essential to obtaining accurate risk scores and reimbursements. Providers can no longer simply submit claims for the services they provide. Instead, physicians and coders are required to review, document and code all chronic conditions and statuses for the patient – regardless of whether they are related to the reason for the visit. It’s a new way of thinking that can be challenging for providers, particularly for those taking on risk for the first time. Yet traditional, manual coding is an extremely time-consuming, labor-intensive and often error-prone process. With so much riding on getting it right, more and more providers are adopting sophisticated automated data analytics tools. These tools can quickly and easily help providers find and close coding gaps at the point of care, so they can improve patient care planning and successfully manage risk-based reimbursements.

  4. It’s still all about better patient care. At the end of the day, MACRA and the shift to value-based care are about making Americans healthier. By increasing MACRA’S flexibility and options, and allowing physicians to ease into the program at their own pace CMS has made it easier for providers to comply with the new program, which will in turn speed up the shift to value-based care and replace the costly effects of fee for service medicine. Paired with the Affordable Care Act’s expansion of access to health insurance, positive change is happening. It’s just a matter of time.
Dean Stephens is the CEO of Talix.
View all Blog Posts