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MACRA, analytics, and their connected way forward

Transforming regulations into business opportunities in healthcare

A bill from your healthcare provider awaits you in your mailbox. You try to make sense of things like “amount applied,” “payment,” and “adjustment,” then you give up, thinking, “I’m sure it’s right!,” and you send off a check!

Multiply that by 55 million and you have some idea of the challenge presented by the implementation of MACRA, the Medicare Access and CHIP Reauthorization Act.

Replacing the unpopular Sustainable Growth Rate (SGR) formula for Medicare payments, the 2015 bipartisan legislation also shifts Medicare reimbursement from a fee-for-service to a pay-for-value basis, a process begun with the Affordable Care Act.

This year is critical to MACRA’s development because 2017’s physician and hospital performance data will be used to determine payments in 2019, the first year of full MACRA implementation.

However, in February of this year Stoltenberg Consulting polled attendees at the annual HIMSS conference on their readiness for MACRA. Two-thirds said they were either “unprepared” or “very unprepared,” citing lack of budget or problems recruiting qualified IT staff as the two main reasons.

Complicating matters is MACRA’s two-track payment model. The Merit-based Incentive Payments System (MIPS) is closest to the old SGR fees-for-service model but contains pay-for-performance metrics and potential penalties, both designed to encourage physicians and hospitals to adopt the second payment option, the Alternative Payment Model (APM).

APMs offer greater bonus payments if certain performance metrics are met but they also require the healthcare provider to take a greater financial risk. Commentators generally agree that, sooner rather than later, all doctors and hospitals will migrate to an APM.

Somewhat lost in the scramble to implement MACRA is any discussion about whether linking performance to payment actually results in improved healthcare and patient outcomes. The data reporting burden is estimated at 785 hours annually per doctor.

A Government Accountability Office study from last fall found that the Department of Health and Social Security’s failure to develop standardized “electronic quality measures” for assessing performance makes drawing meaningful conclusions about performance almost impossible. Such standardized metrics would also enable the development of data collection systems that would reduce the administrative burden on doctors.

Another very real danger is that MACRA’s demands and complexity will favor medium to large medical organizations who benefit from administrative economies of scale, to the detriment of individual physicians and smaller practices who may be among the last to migrate from MIPS.

As broadly welcomed by the healthcare community as it is, MACRA still presents many challenges. It is very much a work in progress and modifications will be regular and plentiful. It’s also not a panacea by itself, standardized metrics and regulatory simplification would go a long way to help smooth its implementation.

What are the best next steps? First and foremost, you must do an assessment of your analytics capabilities as these capabilities will be fundamental to properly preparing for MACRA. Your analytics platforms need to be able to meet MACRA requirements, specifically related to the collecting, monitoring, and reporting of measures and scores. But don’t just prepare for MACRA with this assessment, use this as an opportunity to restructure for long-term success as you navigate from the old world fee-for-service to the new world value-based care era.

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Tim Exton is a healthcare aficionado and a freelance journalist based in Seattle. He has reported on a wide variety of topics for international news agencies and organizations including Reuters, Agence France Presse, Seattle Times, The Guardian, and NBCNews.com. Tim is a personable Englishman who loves hearing from his readers, so feel free to contact him at healthcare@sutherlandglobal.com.