MACRA Final Rule: Healthcare Focuses On Quality, Healthier Patients, And Lower Costs

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The Medicare Access and CHIP Reauthorization Act, more commonly known as MACRA, was initially passed by Congress in April 2015 with the objective of enhancing the quality of healthcare, payment of physicians, and controlling costs incurred by Medicare Part B (medical insurance). It was proposed as a replacement of the Sustainable Growth Rate (SGR) formula, dating back to 1997, which established a regulation on the costs of physician services for those with Medicare. The SGR was deemed inefficient due to its focus purely on physician cost, while disregarding the quality of the care provided. MACRA is a change in focus for healthcare providers – improving the care patients are receiving, rather than expanding on the services they provide. It introduced a change to how Medicare creates a relationship between performance and payment, thus establishing a foundation that focuses on value, effectiveness, quality, and responsibility. On October 14, 2016, the MACRA final rule was released to the public, creating controversial opinions in its benefit on health care. Though developed with good intentions, MACRA adds new costs and complexities to healthcare providers.

MACRA was designed with two payment programs, Alternative Payment Models (APMs) and Merit-Based Incentive Payment System (MIPS).

Alternative Payment Models

The first MACRA payment program is Alternative Payment Models (APMs). APMs is a risk-based plan between the individuals who seek medical care and the health care providers within an Accountable Care Organization (ACOs). To receive payment through this program, providers must meet the following requirements that qualify them for the compensation through APMs:

  • Participants must use certified electronic health record technology (CEHRT).
  • Payment reimbursement amounts are based on the quality of care according to established CMS performance metrics
  • Must bring a percentage of financial risk.

Merit-Based Incentive Payment System

The second payment system under MACRA is the Merit-Based Incentive Payment System, more commonly referred to as MIPS. Physicians are provided payment for their services based on an overall score on their performance. There are four categories used to calculate the total performance score: Quality (50%), Advancing Care Information (25%), Clinical Practice Improvement Activities (15%), and Resource Use (10%). The overall score is calculated and compared against a threshold, set by the Centers for Medicare and Medicaid Services (CMS), to determine the payment adjustment provided to a physician.

As a necessary qualification for both APMs and MIPS, the Electronic Health Record (EHR) is the heart of MACRA. MACRA concerns itself with patients first, thus placing its focus on improving the quality of patient-centered care. It stresses the importance of collecting patient-reported data as a means to influence care at both the individual and population patient level. MACRA increases healthcare transparency by providing the means for individuals to partake in the decisions made regarding their healthcare quality and effectiveness. The approach for reimbursement for physicians was a considerable concern for years. The implementation of MACRA provides the solution many people were looking for – a value-based care system. Additionally, it places emphasis on the Meaningful Use of EHR programs. Physicians are now able to improve the services they provide their patients while reducing labor-intensive reporting requirements.

While it is widely agreed that healthcare payment models needed reform, the implementation will not be easy. Moving from a “fee for service” model to MACRA requires significant investments by healthcare providers. Many healthcare providers have stated that they already spend a significant amount of time and money reporting on quality measures back to CMS, but few find that tracking and reporting on these metrics actually leads to better quality care for patients. With MIPS, these reporting requirements increase in both number and complexity, and providers that are not prepared to track and report on the necessary performance metrics could face penalties. Currently the APMs are not available to all providers, so placing investments and using MIPS is almost forced upon many healthcare providers as their only option to move forward.

Change is never easy and the complexities of healthcare only make changing payment models more challenging. Passing MACRA legislation took four years and it will take even longer for healthcare providers to fully understand its complexities and fully implement systems and performance tracking that will streamline their reporting. While the whole purpose of the legislation is to drive better care for patients, it could potentially cause the opposite if physicians are more focused on how to properly report data the instead of focusing on their patients. In times like these it would behoove healthcare providers to look outside their organization for help from companies that specialize in processes, systems, and data that can help transform the way they do business for MACRA compliance. For MACRA, healthcare providers that figure out how to adhere to the new payment models fast will be the most profitable, which hopefully also means that they are providing higher quality care for their patients.