Written by: Definitive Logic Corporation (DL)
The Medicare Access and CHIP Reauthorization Act, more commonly known as MACRA, was initially passed by Congress in April 2015 with the objective of enhancing the quality of healthcare, payment of physicians, and controlling costs incurred by Medicare Part B (medical insurance). It was proposed as a replacement of the Sustainable Growth Rate (SGR) formula, dating back to 1997, which established a regulation on the costs of physician services for those with Medicare. The SGR was deemed inefficient due to its focus purely on physician cost, while disregarding the quality of the care provided. MACRA is a change in focus for healthcare providers – improving the care patients are receiving, rather than expanding on the services they provide. It introduced a change to how Medicare creates a relationship between performance and payment, thus establishing a foundation that focuses on value, effectiveness, quality, and responsibility. On October 14, 2016, the MACRA final rule was released to the public, creating controversial opinions in its benefit on health care. Though developed with good intentions, MACRA adds new costs and complexities to healthcare providers.
MACRA was designed with two payment programs, Alternative Payment Models (APMs) and Merit-Based Incentive Payment System (MIPS).
Alternative Payment Models
The first MACRA payment program is Alternative Payment Models (APMs). APMs is a risk-based plan between the individuals who seek medical care and the health care providers within an Accountable Care Organization (ACOs). To receive payment through this program, providers must meet the following requirements that qualify them for the compensation through APMs:
- Participants must use certified electronic health record technology (CEHRT).
- Payment reimbursement amounts are based on the quality of care according to established CMS performance metrics
- Must bring a percentage of financial risk.
Merit-Based Incentive Payment System
The second payment system under MACRA is the Merit-Based Incentive Payment System, more commonly referred to as MIPS. Physicians are provided payment for their services based on an overall score on their performance. There are four categories used to calculate the total performance score: Quality (50%), Advancing Care Information (25%), Clinical Practice Improvement Activities (15%), and Resource Use (10%). The overall score is calculated and compared against a threshold, set by the Centers for Medicare and Medicaid Services (CMS), to determine the payment adjustment provided to a physician.
While it is widely agreed that healthcare payment models needed reform, the implementation will not be easy. Moving from a “fee for service” model to MACRA requires significant investments by healthcare providers. Many healthcare providers have stated that they already spend a significant amount of time and money reporting on quality measures back to CMS, but few find that tracking and reporting on these metrics actually leads to better quality care for patients. With MIPS, these reporting requirements increase in both number and complexity, and providers that are not prepared to track and report on the necessary performance metrics could face penalties. Currently the APMs are not available to all providers, so placing investments and using MIPS is almost forced upon many healthcare providers as their only option to move forward.
Written by: Definitive Logic Corporation (DL). Definitive Logic has over 17 years specializing in complex data sets and implementing both COTS and custom solutions to drive efficiencies for clients. Utilizing a vendor agnostic approach to technology allows us to recommend solutions with the right mix of technologies to address even the most complex situations. In addition to technical expertise, Definitive Logic has over a decade of experience supporting healthcare organizations such the Department of Veterans Affairs (VA), Defense Health Agency (DHA), and CMS. We help health organizations expose actionable intelligence quickly and effectively from data stores and systems to inform key people, enable better decisions and optimize performance.