Reprinted from HEALTH PLAN WEEK, the most reliable source of
objective business, financial and regulatory news of the health insurance
industry.
By Patrick
Connole, Managing Editor
February 15,
2016 Volume 26 Issue 6
MACRA, not ACA, should be the acronym
health plans and other stakeholders focus on in 2016, according to Anne Phelps,
principal and U.S. health care regulatory leader for Deloitte LLP. She has
co-authored a new primer (“Top Regulatory Trends for 2016 in Life Sciences
& Health Care”) on issues like Medicare reform, the Cadillac tax, drug pricing,
Medicaid managed care and final Obama-era Affordable Care Act rules and tweaks.
But it’s the Medicare Access and CHIP
Reauthorization Act of 2015, or MACRA, that she thinks should draw the most
attention because of its long-term promise. The law, which replaced the “doc
fix” or Sustainable Growth Rate (SGR) model last spring when it was enacted
with overwhelming approval in Congress and the support of the president, could
set in motion powerful incentives, making it a real disruptor of the
traditional fee-for-service (FFS) health care revenue model.
The law provides a 5% annual bonus for
medical providers who participate in Alternative Payment Models (APMs),
risk-bearing coordinated-care models that move physicians away from FFS. Under
MACRA, provider groups can qualify if they take downside risk for at least 25%
of their payments (the 25% figure will increase to 50% in 2021).
“Health care professionals who opt to
stay out of the new risk-bearing coordinated care models will receive lower
payment updates and will be subject to significant new reporting requirements
under the Merit-based Incentive Payment System,” the Deloitte paper explains.
This program offers bonuses based on quality, use of resources, use of
electronic health records and practice improvement.
And unlike other reforms, MACRA has the
potential to force health plans to rethink strategies in the way they work with
providers, first in Medicare, then possibly across Medicaid, Medicare Advantage
(MA) and commercial segments, Phelps tells HPW.
“The reason, in a nutshell, why I think
it is so incredibly important is that for a long time and in the ACA and in
general we have been moving toward these trends of value-based care. And all of
those things that you hear about, like moving from volume to value and sharing
risk and population health, it’s been very voluntary, regional-based and more
of a carrot approach,” she says. “We’ve had all different kinds of delivery
models. We’ve had ACOs, some of which have fared better than others. We’ve had
medical homes. We have demonstrations around bundled payments. So we are moving
in that direction but in fits and starts, and it has not been national in
scope.”
New Statute Breaks Fresh Ground
But MACRA is such a game changer
“because it kind of goes in underneath at the very basic level all the way down
to the individual practitioner/physician,” Phelps says.
Physicians who opt for the Merit-based
Incentive Payment System will be scored at an individual level, which is new
for CMS. “You are going to get a new composite score based on new measures that
will be made public and then that will be tied to your updates. And those
updates could be positive, they could be zero or they could be negative. And we
have never had that before in Medicare. So if they stay on a certain path there
is a risk associated with it to their revenue and or reputation,” she says.
The other path is to join an APM,
Phelps continues, “and the reason why the distinction between the payment
models and the delivery model is so critical is it really gets at the
underlying driving financial incentives at the very base level of the
individual practitioner and the hospital.” MACRA is also large in scope at the
national level in its approach. “And I think we all know so much of our health
care delivery reform or models are driven by the payment model. MACRA
fundamentally changes the payment model. Because it is about individual
physicians and other providers along with their hospitals and plans figuring
out the payment model, which is three things: You have to share risk [upside
and downside] that is more than nominal, you have to have a certified electronic
health record that is interoperable and third you have to meet certain quality
measures.”
If providers achieve these marks, then
they receive higher payments, higher bonus payments and higher Medicare
reimbursement in the future.
Health Plans Enter the Picture
What about the role of insurers? Phelps says the reason health plans
are going to care so much about MACRA is because an insurer is only as good as
its network and its strategic alliances, so providers have to be able to manage
that risk both on the revenue side and the clinical side. “The other critical
piece is that the law envisions expanding beyond Medicare to what is called an
all-payer model,” she says. “And if a health plan can help drive revenue and
help meet these new payment models across Medicare, and then potentially
Medicaid, MA and the commercial market, they are going to be able to help their
providers and their doctors achieve more toward those new payment models. And
that is why in my mind it is a huge strategic play for health plans.”
Health plans can aid providers through
their data expertise, Phelps says. “It is a new opportunity for health plans
[because of the granular nature of MACRA] to look at these payment models and
go back and look at their delivery models too. Many of them have a lot of
really good strategic alliances and joint ventures already with hospitals…and
now they will be helping them dive down a little deeper to the individual
practitioner level to say ‘how can we help you manage the risk on clinical and
revenue side?’”
In the short term, MACRA will be about
shoring up their health plan alliances and maintaining or building their
reputation. But in the long run with a possible all-payer model in place, it
will be about how insurers can capitalize on strategies to help providers reach
clinical success and bring in more revenue across each segment of the
marketplace, she says. “For example, plans focused on high-value narrow
networks find out individual doctors are not scoring so well. Say they are
struggling with a reporting score and not doing well versus others nationally.
If, like on a bell curve, they fall on the lower end or middle it may affect
your brand and revenue for a hospital,” Phelps adds.
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