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MACRA’s Current Landscape (Part Two of a Two-Part Series)


Applying a year of lessons learned will help ensure MACRA and its Quality Payment Programs evolve and drive value-based competition in healthcare over the long term.

The Medicare Access and CHIP Reauthorization Act (MACRA) can help drive healthcare toward competing at the level of clinical conditions, improving outcomes while driving down costs, as we explained in the first part of this article. That said, the legislation’s Quality Payment Programs (QPP), especially the Merit-Based Incentive Payments System (MIPS), have been roundly criticized. Industry, government and academia have gone so far as to say that MIPS is failing and should be eliminated. Yet payers and providers have invested in complying with MIPS. What’s the way forward?

Our take is that while the legislation’s details are likely to be adjusted, MACRA is here to stay because its value-based incentive programs reflect the inevitable direction of the healthcare industry. Many payers and providers we work with already are seeing benefits from complying with the legislation. They consider MACRA a framework for helping the industry move toward value-based competition and see their investments in it as positioning them to compete on clinical conditions vs. simple regulatory compliance.

MIPS: A Work in Progress

MIPS is the most criticized aspect of MACRA. In its March 2018 report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended it be eliminated. MedPAC’s concerns echo those of other industry groups and academia: namely that MIPS doesn’t effectively drive quality or value because it is complex and poorly designed and doesn’t incent physicians to change their practices.

The MedPAC report charges that too few clinicians participate in MIPS reporting and payment adjustments, while those that do participate are essentially free to choose measures on which they know they will do well vs. trying to improve in subpar areas or joining Advanced Alternative Payment Model programs with higher risks and rewards. Further, there are no standards for comparison: two practices may receive identical high MIPS scores — but on completely different measures.

Further, MedPAC said MIPS-based payment adjustments are too small in the early years to incent change and “arbitrary” in the later years of the program, creating financial uncertainty. MedPAC concludes its report by calling for the elimination of MIPS.

Despite those strong words, the general industry consensus seems to be that while MIPS is flawed, it is also flexible and could be reinvented to better meet its goals. One example is how the Centers for Medicare & Medicaid Services (CMS) saw a need for and changed the MIPS eligibility threshold for 2018 to exclude clinicians and groups billing $90,000 or less in Medicare Part B allowed charges or serving 200 or fewer Medicare Part B patients.

Also, beginning in the 2019 performance year, CMS is introducing an all-payer option under which clinicians can achieve required participation thresholds using a combination of Medicare advanced alternative payment models (APMs) and “Other Payer Advanced APMs,” meaning value-based payment arrangements with non-Medicare payers including Medicare Advantage, Medicaid, the all-payer models established by the Center for Medicare and Medicaid Innovation (CMMI), and commercial payers.

MACRA and MIPS are still being refined, with CMS able to address valid criticisms. The question is how will providers and payers respond to uncertainty around MIPS?

Providers and Payers: Collaboration is the Way Forward

While MIPS compliance seems expensive — CMS estimates that for 2018, MIPS will require approximately $700 million in reporting costs — MedPAC acknowledges that the MIPS quality measures “are largely the same” as those in the Physician Quality Reporting System (PQRS) and physician valued-based payment modifier (VM) that MIPS replaces. Further, the MIPS ACI category is “substantively similar” to the previous EHR meaningful use program. This means that many providers already have processes in place to collect data required by MIPS.

Further, providers adopting MACRA are finding success. Of the 100,000 physicians who applied for the advanced APM bonus in the first available year, 99% qualified for it.

We also are working with leading payers that are leveraging MACRA data to forge closer relationships with providers to mutual benefit. Payers tend to have more sophisticated systems to store and analyze MIPS and advanced APM data to identify providers who perform well under both quality and cost measures at the clinical level.

The exchange of data between payers and providers is mutually beneficial. Payers could assist providers in educating patients and improving adherence, while sharing analytics results will help in balancing risk and enable mutually beneficial contract negotiations.

Collaboration does require increased systems interoperability between payers and providers. This is a critical problem in the industry. Technology platforms are emerging that can extract critical data for analysis while masking the complexity of underlying systems. Artificial intelligence (AI) and machine learning tools also are growing rapidly in sophistication and can enable healthcare organizations to streamline data collection processes.

Steps to Take Now

Healthcare organizations should not let uncertainty about government-mandated value-based programs delay their investments in the systems and capabilities required for success under value-based competition. Here are three key steps to take now:

Figure 1

CMS is likely to continue tweaking MACRA and may remodel MIPS. Providers and payers need to put these possibilities in context: the rise of value-based competition is inevitable. Working toward bonuses under either MIPS or advanced APM will help providers understand their strengths and weaknesses when it comes to delivering great outcomes at lower costs.

Payers can collaborate with providers on these goals because that will help them deliver more value to their members and compete effectively as the industry becomes consumer-focused. The challenge is not whether to comply with MIPS but rather starting now to develop the systems, processes and philosophies required to compete on clinical value in a reshaped healthcare industry.

The previous installment in this series examined ways to move beyond MACRA’s zero-sum game. To learn more about MACRA, visit the Healthcare section of our website.

This Perspectives series was written by Octavia Costea, MACRA Lead and Manager, Healthcare, Cognizant Business Consulting, and Steven Rounds, Senior Consultant, Healthcare, Cognizant Business Consulting. For more information, please contact us @

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