Prepare for MACRA's Financial Impact

How Physicians Can Prepare for
the Financial Impact of MACRA
̶ Bryan Oshiro, MD

© 2016 Health Catalyst
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.
Medicare Access and CHIP Reauthorization Act
MACRA
The proposed MACRA rule has already
generated enough pain to warrant its own
ICD-10 diagnosis code.
The rule redefines the core of how physicians
and other healthcare professionals (now all
referred to as Eligible Clinicians or ECs) will
be reimbursed.
MACRA is easily the most profound change
to the payment program in the last 60 years
and will alter the way care is delivered and
ECs practice.

MACRA Highlights
MACRA will consist of two payment structures:
• Merit-based Incentive Payment System (MIPS)
• Advanced Alternative Payment Models (APM)
The American Medical Association provides
excellent resources that summarize and
answer questions about both structures, as
does CMS, which published a Quality Payment
Program fact sheet with well-illustrated details
on the new payment models.
Bobbi Brown
Health Catalyst – VP of Financial Engagement
The 7 Best Ways to Prepare for MACRA Today

MACRA Highlights
ACOs, patient-centered medical
homes, and bundled payment models
will all qualify under the APM structure.
The majority of providers, those who
practice outside of these models, will
default to the MIPS structure. MIPS will
not apply to hospitals or facilities.
The CMS proposal is that, eventually,
almost all providers will be reimbursed
through these mechanisms rather than
a fee-for-service arrangement,
although the latter will be retained.
There will be MIPS exceptions
Physicians newly enrolled in the
Medicare program
Physicians with less than or equal
to $10,000 in Medicare charges
AND less than or equal to 100
Medicare patients annually
Physicians who are already
involved in an advanced APM
through their hospital systems

The Financial Impact of MACRA
The fee schedule for all providers will adjust
upward by 0.5 percent annually from now
through 2019.
Physicians aligned with certain APM
structures will assume a certain amount of
penalty risk.
To encourage participation, the APM track
will provide 5 percent bonus payments
every year from 2019 to 2024 to providers
joining new models.

The Financial Impact of MACRA
Physicians under this structure will only
need to adhere to the quality reporting
requirements of the APM and will be
exempt from the MIPS quality program.
MIPS providers who score well will receive
annual bonuses of 4 percent in 2019, 5
percent in 2020, 7 percent in 2021, and 9
percent for 2022 and beyond.
On the flip side, physicians who don’t
meet all requirements will face penalties of
those same amounts for those years.

Five Key Points that Demand Attention
CMS, in designing these programs,
anticipated winners and losers.
The reimbursement scores center around
quality, advancing care information, clinical
practice improvement activities, and
resource use.
The metrics for these categories will zero in
on providers focused on population health
and coordinated care, so they will be the
ones that experience significant positive
adjustments in their reimbursement rates.
1. Smaller practices will feel the biggest pinch

The medical home model, which includes
primary care providers and patients
empaneled across the continuum of care,
will qualify as an advanced APM.
Thus, the specialties that interact closely
with primary care in providing services for
heart disease, diabetes, or other chronic
diseases, are also going to benefit the
most from this thanks to the already-
established coordination.

Unfortunately, small and rural practices, as
well as those that practice preventive
maintenance, such as chiropractors,
dentists, optometrists, and behavioral
health providers stand to lose the most
because they tend to operate in isolation.
It stands to reason that many physicians in
smaller practices will seek employment
with hospitals and large independent
physician groups, or affiliate with hospitals
via joint ventures.

As physicians, we make diagnoses, tell
patients what to do, write prescriptions, and
tell them we’ll see them in three months.
Under the new models, the physician will be
just one part of the care team.
The proposed rule will move beyond this
style of care and provide for community
partnerships in helping to care for patients.
2. Issues such as care coordination and shared decision making
will need to be worked into the normal practice workflow in order
to fully benefit from, or at least not get penalized under, MACRA.

Patients will need to be an integral part of
their care and really understand the care
plan. This is where care coordination and
shared decision making will come into play.
The team may include a nurse, a pharmacist,
and a social worker who are all managing a
group of patients with chronic conditions to
make sure their needs are being met, such
as arranging transportation, prescriptions,
planning meals and exercise programs.
2. Issues such as care coordination and shared decision making
will need to be worked into the normal practice workflow in order
to fully benefit from, or at least not get penalized under, MACRA.

The provisions of MU will still be in effect.
Under MACRA, it will change from focusing
on EMR use into an expanded usage of
electronic health systems allow more patient
access and interaction with their information.
3. Meaningful Use (MU) will not disappear, but will morph into a
different program encompassed by MIPS.
…the Meaningful Use program as it has existed,
will now be effectively over and replaced with
something better.”
Andy Slavitt
CMS Acting Administrator

The category of Advancing Care Information,
will account for 25 percent of the MIPS score
in the first year.
It will transform the complexity and focus of
meaningful use in terms of how electronic
access is going to help, rather than just
providing a check-off box to show that a
practice did something.
Advancing care information will require using
an EMR for tracking patient performance and
improving care coordination.

Patients are far more mobile now, moving
between facilities and between providers.
Interoperability is the access to patient
information across all systems.
With patients no longer limited to seeing a
single doctor in a single facility, care must be
more comprehensive and global in nature.
The practice of having a single EMR
confined within the walls of a single
institution or clinic is no longer acceptable.

Providers will still need to protect medical
records from outside intrusion.
HIPAA remains intact. Electronic
prescribing will still be a focus.
But the bigger issue will be on sharing
health information across a broader
spectrum of care provider networks
and settings.

These professionals aren’t normally associated
with these types of programs, but CMS rules
and regulations don’t stop with Medicare; they
are also concerned with Medicaid patients.
Some programs pioneered by MACRA will leap
into the private insurance market as well, so
there will be issues that need to be addressed
by all healthcare providers, not
just physicians.
4. MACRA will impact not only physicians and traditional primary
care providers, such as nurse practitioners and physician
assistants, but others, including physical therapists, nurse
midwives, and clinical psychologists.

To track all of the metrics and participate
in this new program successfully will
require considerable ramp up time,
which means physicians will need to get
very proactive.
We’ve had a lot of experience at Health
Catalyst in getting services up and
running at many hospitals and practices.
5. Preparation will be paramount.

We know that, even though improve-
ments can be realized sooner, it takes a
good six months to put a solid process in
place and to have enough data to show
that a new program is doing well.
And this is for larger facilities with
abundant resources.
With all of the provisions related to MIPS
and APMs, practices, especially smaller
ones, will need to be very prepared in
order to show meaningful outcomes
5. Preparation will be paramount.

More “MACRA-economics”
The MACRA rule brings more transparency
to healthcare than ever before.
It will accelerate a lot of changes, where
we will move from just treating acute
illnesses after they occur toward a public
health type of practice in the U.S.
There will be a reduction in the way dollars
are currently spent with all the rescue care
that we do.
We can’t afford to increase healthcare
spending; it’s already a $3 trillion industry.

Right now we are independent practices
siloed by affiliation, practice, payment
mechanisms, and geography.
MACRA will provide some hope on the
interoperability frontier. It will take some
steps toward developing a system of care.
MACRA will reduce the amount of
mandatory regulatory reporting by
streamlining the reporting process for
small practices that don’t have the
wherewithal of larger systems.

CMS will be using claims-based data to
track some of the measures and
simplify the reporting.
Physicians will be able to choose which
programs they are part of, so their
reporting requirements will be aligned
with that choice.
There will generally be much more
control of what gets reported through
this program.

Smooth Sailing or Stormy Seas: Early Adoption Is Key
There will be some stormy seas and we
may temporarily lose the compass. Most
providers won’t proactively research this
until it’s absolutely necessary. To
participate successfully in MACRA,
requires proactive preparation.
One good resource is the webinar I
participated in, titled, Making Sense of
the New MACRAAnnouncement.
Besides the CMS, AMA, and ACP
websites, good resources are also
available from specialty-specific and
payer websites.

Smooth Sailing or Stormy Seas: Early Adoption Is Key
Once MACRA is upon us, there will likely
be a great deal of frustration and anger
about how to navigate the MACRA
environment, unless clinicians and their
practices are well prepared.
This will be the most profound transform-
ation of Medicare reimbursement, possibly
for decades to come, so it will literally pay
to get out in front of it.

For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

More about this topic
Link to original article for a more in-depth discussion.
How Physicians Can Prepare for the Financial Impact of MACRA
The 7 Best Ways to Prepare for MACRA Today
Bobbi Brown, VP of Financial Engagement
Making Sense of the New MACRA Announcement
The Best Solution for Declining Medicare Reimbursements
2015 Sustainable Growth Rate Repeal: The Future is Here
Surviving Value-Based Purchasing in Healthcare (Webinar)

Bryan Oshiro, MD joined Health Catalyst in January 2014 as the Medical Director. He received
his medical degree and completed his residency in Obstetrics and Gynecology at Loma Linda
University School of Medicine and completed his fellowship in Maternal-Fetal Medicine at the
University of Texas in Houston before moving to Salt Lake City to join Intermountain Health Care
and served as the Medical Director of the Women and Newborn Service line. He also was a
member of the department of Obstetrics and Gynecology at the University of Utah.
He then joined Loma Linda University where he became the division director of Maternal-Fetal Medicine and the
vice-chairman for the department of Obstetrics and Gynecology. He co-chairs the American College of
Obstetricians and Gynecologists Patient Safety Committee for District IX and received the Elaine Whitelaw
Service Award from the March of Dimes for his work on a 5 state initiative to eliminate elective deliveries less
than 39 weeks gestation.
Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com

Prepare for MACRA's Financial Impact

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