MACRA will drive value-based reimbursement momentum

March 19, 2016

During the keynote session at the Advanced Payment Models in Healthcare Conference 2016, PwC experts shared how MACRA legislation will affect reimbursement.

Across the country, increasing numbers of plans and providers are participating in value-based payment models. In fact, the Centers for Medicare and Medicaid Services (CMS) recently announced it met its target of having 30% of Medicare payments tied to value 11 months ahead of schedule. 

While more payers and providers are getting on board with alternative payment models, new legislation is also helping drive the movement.

In April 2015, President Barack Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) into law. Most known for repealing the sustainable growth rate formula (SGR), the legislation also contains regulations related to physician payment.  

During the Advanced Payment Models in Healthcare Conference 2016, held in Orlando, Florida, March 17 and 18, attendees heard more about MACRA’s effects on reimbursement during the keynote session, “Advancing Opportunities for High Quality Care through Physician Payment Reform.”

The session was presented by Matt DoBias, senior manager at PwC Health Research Institute, and Igor Belokrinitsky, principal in the health industries practice at PwC.

“In many ways, MACRA genuinely reflects Medicare and Medicaid’s drive towards payments that are based on the quality of care physicians deliver rather than the quantity of procedures they perform,” DoBias recently told Managed Healthcare Executive. “The law creates two new payment streams beginning in 2018-one known as the Merit-Based Incentive Payment System (MIPS) and another focused on providers who are in an alternative payment model.”

Both tracks offer built-in bonuses if providers meet and exceed certain quality metrics, said DoBias. For those providers that opt for the alternative payment model, the highest performers could achieve a 5% bonus payment on top of the built-in increases in reimbursement.

“It won’t be easy, but the overarching goal is to nudge physicians into a position where they have real money at risk in order to gain substantial rewards,” he said.

Next: Broader effects

 

 

Broader effects

On one level, physician practice groups that choose the alternative payment path-or already participate in one, such as the Medicare Shared Savings Program, are fulfilling CMS’ goal to shift providers away from traditional fee-for-service payments, Belokrinitsky told Managed Healthcare Executive.

But, he said, MACRA could accelerate this shift.

“One of the benefits of MACRA over, say, the outdated SGR formula, is that it gives physicians both predictability and stability to make decisions for their practices. I know at first blush this sounds counterintuitive-especially since so much of the law has yet to be fleshed out, but the uncertainty around the old SGR model prevented some practices from making investments in new technologies, for instance, and other high-dollar purchases. MACRA boosts physician payments-and then offers them a chance to get even more in reimbursement over several years.”

While many of MACRA’s core changes don’t take place until 2018, healthcare executives at provider organizations should prepare now, said DoBias. “The first reporting year is likely to be 2017, which means discussions around what type of payment model best fits the practice’s own core strengths should begin sooner rather than later.”