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Perspectives

MACRA: Marching Healthcare Toward Value-Based Care (Part 1)

2017-08-10


Complying with MACRA quality measures gives healthcare organizations the opportunity to succeed with value-based reimbursement programs; here’s our take on how payers and providers need to work closely together to avoid its pitfalls and achieve its benefits.

More than a mere set of performance measures, the Medicare Access and CHIP Reauthorization Act (MACRA) will have an impact felt long after its debut this year. MACRA’s influence will push the industry more swiftly toward value-based care and reimbursements for all types of organizations. Providers and payers that work together on MACRA solutions with this broader perspective in view will establish a solid foundation for managing value-based care and gain additional competitive advantage in the market, beyond securing bonus payments in 2019. 

MACRA introduced the Quality Payment Program (QPP) in January 2017, creating the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM), both of which require healthcare organizations to capture a range of performance measures that will determine Medicare reimbursement adjustments tied to bonuses or penalties (see graphic).

Figure 1

MACRA eliminates the sustainable growth rate (SGR) formula. Its new Quality Payment Program replaces three physician fee schedule (PFS) programs: the value-based modifier (VBM), physician quality reporting system (PQRS) and meaningful use (MU). The Advanced APM program is designed for larger organizations able to assume more risk.

Succeeding under MACRA’s performance measures could result in payment adjustments as high as 27% in the next few years, which would net substantial gains for organizations with high Medicare revenue. Achieving that success will require strong interrelationships among payers and providers in these four key areas:

Operations.

Interoperability between systems, modernizing IT infrastructure, maintaining data integrity and having strong data analytics capabilities are all vital to extract meaningful insights from MACRA measures.

Administration. 

Implementing MACRA requires strong planning and change management skills, with clear lines of accountability, as well as champions to evangelize for new programs. 

Clinical. 

Well-defined engagement processes for clinicians will help ensure that MACRA performance measures are collected with consistency, while patients’ experiences are improved.

Finance. 

This area is critical for selecting the best initiatives by leveraging sophisticated economical and financial analysis, such as NPV, IRR or CBA modeling.

Along with the successful Heathcare Effectiveness Data & Information Set (HEDIS) and the Medicare Stars system, MACRA pushes the industry toward value-based care and integrated health management by providing incentives to standardize care, reduce costs and improve population health. Healthcare organizations must now make it a priority to assess, leverage and improve administrative, clinical, financial and operational capabilities to be competitive in the marketplace.

They must assess their ability to manage risk-based contracts; to understand their data integration points and flows, or lack of same; to commit to making needed improvements; and to embracing the cultural changes that a fundamental shift in reimbursements and quality measures will drive. Strengthening these capabilities to reap potential MACRA rewards will likely require payers and providers to partner and join their complementary data and strengths. Both have vested interests in effective integrated health management, and neither will achieve that goal on their own. 

In our next installments, we’ll look at how providers can use MACRA as a driver to ready themselves for value-based care and then examine the unique role MACRA creates for payers. Whether provider or payer, organizations need to be ready for these changes and the industry’s inevitable and accelerating shift to value-based care. 

To learn more about MACRA, read the other two articles in this series, “How Providers May Maximize MACRA Benefits” (Part 2), “Note to Payers: Seize Your MACRA Opportunity(Part 3) and visit the Healthcare section of our website.

This Perspectives series was written by Octavia Costea, Cognizant’s MACRA Service Offering Leader, and Vanessa Pawlak, Cognizant’s Regulatory Compliance Service Line Leader. For more information, please contact us @ inquiry@cognizant.com.

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MACRA: Marching Healthcare Toward Value-Based Care (Part 1)