Two years after the passage of the Medicare Access and CHIP Reauthorization Act and six months into the first performance year of the law's Quality Payment Program, health plans, health systems and physician groups are still trying to get up to speed on program requirements, close gaps in readiness and identify strategies for success, according to Optum.
Optum conducted a survey in June of about 150 payer and provider decision-makers who influence MACRA strategy within their organizations to find the majority of respondents have major concerns about MACRA readiness.
This content is sponsored by Optum.
"While more clinicians are now aware of MACRA, we're still very much in a world where there's a lot of education that still needs to be delivered and received on the part of the stakeholders, " says Erik Johnson, vice president of Optum's value-based care practice. "We're not quite to the point where we've hit critical mass with regard to how many people are actually taking proactive steps to address and prepare for the issue."
Preparing for MACRA's QPP, which overhauls the Medicare physician payment system, is no easy feat. Payers and providers must use data and analytics expertise to project future financial performance under MACRA and craft a reliable strategy based on those projections. "This is all very difficult and tough stuff," Mr. Johnson says. "Many [stakeholders] have tried to take on risks under Advanced Alternative Payment Models in the past and gotten burned."
Albeit difficult, no one can debate the importance of MACRA preparation. CMS has indicated it is serious about embracing value-based payments and does not intend to delay the QPP ad nauseum like its predecessor, the sustainable growth rate, according to Jay Hazelrigs, vice president of Optum's provider risk advisory consulting practice.
"What we heard loud and clear from CMS is [MACRA] absolutely is here. It's not going away, and although we have two years of transition, it is going forward as a program," Mr. Hazelrigs said after attending a collaboration session with CMS leaders, payers and providers at the Optum Forum in August. "And quite frankly, when you look at the [Medicare] trust fund and the challenges MACRA is trying to address, it has to move forward."
Based on survey findings and observations from the forum, Optum's experts spoke with Becker's Hospital Review about payer and provider progress in preparing for MACRA, identified critical gaps in readiness and recommended several strategic shifts to close those gaps.
Industry consciousness of MACRA has improved
Most payers (88 percent) and providers (83 percent) reported being aware of the data, metrics, reporting and performance management required to succeed under QPP, according to the Optum survey. Yet awareness of the requirements doesn't mean payers and providers are confident about fulfilling them — 88 percent of health plans and 86 percent of providers indicated they had concerns about implementation.
For providers, these concerns may stem from the range of choices presented by the QPP beyond choosing between its two tracks, the Merit-based Incentive Payment System and the AAPMs, according to Mr. Johnson.
"There is a real need to get conversant, articulate and ultimately fluent on the decisions you need to make in terms of the metrics you select, especially in the quality and practice improvement domains," he says.
Choices providers make within the QPP will affect other business areas, particularly those related to Medicare Advantage and other commercial payer contracts — a likely source of payer concern. Optum expects MA plans to experience membership growth over the next few years and providers seeking to lessen their risk in MIPS may add momentum. This growth in membership will add unknown risk to MA plans, with potentially changing risk pools and CMS Star ratings, according to Jim Dolstad, Optum's senior director of actuarial consulting.
Gaps in payer readiness: Finding clarity
In the survey, health plan decision-makers say they anticipate operational impacts (85 percent) and financial impacts (78 percent) from MACRA, but half of respondents are still unclear about the financial implications. Because payers are not directly involved with MACRA, this lack of clarity around potential implications represents a significant challenge. Health plan success in the era of MACRA hinges on anticipating how the law will affect commercial business and adjusting long-term strategy to account for those changes.
MACRA presents several potential risks to commercial payers in addition to cost shifting, which is likely in most markets. There is a potential reputational risk for payers who operate narrow networks if CMS' provider scores and commercial provider scores do not align. MACRA provides newfound negotiating leverage to providers with high MIPS scores in their network contract negotiations with payers. Finally, many payers are struggling with how they will actually pay claims. For commercial plans using a percentage of Medicare rates for reimbursement, the formula will have to be expanded to incorporate unique MIPS multipliers for each provider. This may sound simple, but the reality is this modification will be difficult and expensive for many payers.
"From the operational perspective, people should rightfully be concerned," Mr. Dolstad says. "Some of the providers who score really well in MIPS may become coveted by payers because of that high mark. They may not have scored as well historically with the payer because they are looking at a different set of criteria, but as you try to come up with the public perception that you've got a really good network, you've got to look at how CMS is scoring clinicians."
MACRA also calls for payers to anticipate changes to their financial strategy. In addition to changes in MA membership, Optum expects commercial value-based contracts to decline as providers are distracted by CMS requirements. "If that's the case, then momentum could be partially offset or lost in the commercial marketplace, which would put upward pressure on the claims rate," Mr. Dolstad says.
Gaps in provider readiness: Education and action
Perhaps the greatest red flag in the survey was the lack of MACRA preparedness on the part of providers.
Health system decision-makers reported low levels of general knowledge about the program (36 percent felt very or extremely knowledgeable) or its financial implications (29 percent were very or extremely knowledgeable). Additionally, only 14 percent of health system leaders indicated their clinicians are prepared for MACRA — even though the first measurement year is well underway.
"Everybody has to step up to the plate and make this a front-and-center issue and not a side-of-the-desk problem that people deal with in their non-existent spare time," Mr. Johnson says.
Providers' understanding was visibly amiss regarding MIPS measures and reimbursement structure. The survey showed nearly 31 percent health system decision-makers were unsure about how MIPS reimbursement bonuses work and 27 percent incorrectly believed all providers can receive positive payment adjustments under MIPS, when in fact only half of providers can receive positive adjustments.
"If 50 percent of clinicians experience reimbursement increases, then 50 percent of clinicians will experience reimbursement decreases," says Julie Witt, director of actuarial consulting at OptumInsight. "MIPS is a zero-sum game." Clinicians in MIPS will be evaluated against their peers and scored on curve so the financial penalties collected by CMS pay for the rewards. This will be slightly different in the transition years of the program, when very few clinicians will receive a negative adjustment, Ms. Witt noted. "However, that also means … there's not a lot of money in the transition years to create positive adjustments," she says.
Nonetheless, Optum's experts remain optimistic. "This is different in degree, but not in kind with what CMS has done in the past with regard to payer reimbursement," Mr. Johnson says. Past provider behavior during the introduction of DRG payments, the Physician Quality Reporting System and the Inpatient Quality Reporting program indicate providers can react quickly to incentives they understand. "Once [providers] get this, they can react pretty quickly and with a degree of alacrity and efficiency that is a little surprising," he says.
After education, the final gap in preparedness is collaboration. Most respondents (86 percent of health systems and 87 percent of payers) indicated their organization is working in silos to address MACRA.
"There is a certain irony to that, given that MACRA is designed exactly as we read it. Specifically, to foster collaboration across the delivery chain," Mr. Johnson says. The program aims to get physicians, health systems and post-acute care providers to work together to improve quality, cost and efficiency. This type of collaboration is beginning to take hold in other CMS-led payment reforms like ACOs, according to Mr. Johnson, but he added, "We're not seeing that level of collaborative planning and implementation happening with regard to MACRA, and it is at least as big of deal as those other programs."
How to the close the gaps
Payers and providers can position themselves for success under MACRA by better leveraging analytics to forecast potential performance scenarios and assess their standing in the market. For providers, this will help with the selection of MIPS quality measures and the monitoring of resource utilization. In the long-term, analytics can also help providers assess their readiness for the advanced APM track. "Our view has long been … that advanced APMs are really the more stable, long-term option for folks, albeit the harder one to undertake upfront and certainly the one that has a lot more associated risk," Mr. Johnson says.
From a payer perspective, data is crucial to forecast market-level implications. "The magnitude of the impact is going to vary by geography, and within each geography, it's going to vary by market," Mr. Dolstad says. "You have to look at the solution that works for you as a payer, not what might work for peers, because it will be different in each payer's case."
Most importantly, industry stakeholders — both providers and payers — need to identify partners who can help support affordable long-term success. "Those are table stakes at this point," Mr. Johnson says. "You've got to be able to do that in order to succeed in a value-based care world."
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