Preparing the Infrastructure Culturally and Operationally

Healthcare & Life Sciences

September 22, 2016

The Medicare Access & Chip Reauthorization Act of 2015 (MACRA) fundamentally changes Medicare reimbursement for physician services. Physicians have traditionally been paid on a fee for service (FFS) based on a Resource-based relative value scale (RBRVS). The past several years, the RBRVS scale has been criticized as emphasizing quantity over quality and subsequently driving up the cost of healthcare. To control rising Medicare costs, CMS enacted the Medicare Sustainable Growth Rate (SGR) which would adjust the physician payments each year in order to meet budget. As reimbursement continually decreased, increasing concern from the Medicare provider base called for a permanent fix. MACRA repeals SGR and implements a payment structure that incentivizes quality of care; increases care coordination; and improves healthcare utilization. It is in essence the quantum shift that will drive the market overall to value based reimbursement models.

7 Reasons to Prepare Culturally and Operationally for MACRA

Health systems and medical groups need to begin to prepare culturally and operationally now for MACRA because of the following seven key factors:

  1. Significantly changes physician payment (e.g. capping annual increases)
  2. Sunsets current value-based programs (e.g. PQRS)
  3. 2017 is the baseline performance year of quality measurement
  4. Many commercial payors shadow Medicare payment methodologies (~18-24 months)
  5. Most provider compensation plans do NOT include a significant portion tied to quality and compensation design changes typically take 1-2 years
  6. Care team and other operational models to prepare for value take time to engrain culturally and build into workflows (e.g. mid-level leveraging, a patient experience cultural mindset, standardized templates for open patient access, etc.)
  7. Winners and losers with large payment penalties/bonuses tied to quality outcomes The current Medicare core quality measures are the major components of the new MACRA payment system (see Table A). FTI implements a methodology to estimate how much in Medicare payments will be lost in future years based upon current performance measures.

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