Under the New “Budget Neutral” MACRA Physician Payment System, Some Will Lose To Pay the Winners

She came to the urgent care center with a sprained ankle. The primary care provider gave her excellent care, expertly applying evidence-based evaluation guidelines to her situation, and, thereby, avoiding unnecessary x-rays. By all measures, the provider’s care was excellent, but the interaction still ended up reducing his salary. You see, that patient’s only medical interaction that year was for this ankle sprain, and the provider was therefore held accountable for all of her primary care needs. Since she had not received a mammogram that year, or received a diabetes screening, he incurred an end-of-the-year penalty for failing to meet these quality standards.

-Peter Ubel, MD from KevinMD.com

In an article entitled MACRA-economics 101: Prepare today for tomorrow’s outcomes in Healthcare IT News, author Arien Marec gives one of the cleanest and most concise roundups of the new quality-driven, outcomes-based value reimbursement system that came out of the Medicare Access and CHIP Reauthorization Act of 2015. Under MACRA, providers will be taking on risk for patient outcomes. Marec tells us that providers who aren’t ready to provide data showing their patients are being treated according to guidelines, have good patient satisfaction scores and an effective electronic health record system are going into the new payment world ill-equipped to survive.

After the final MACRA rules were issued on Monday (May 2), the Medical Group Management Association senior vice president of government affairs, Anders Gilberg, warned that solo practitioners and physicians in small groups of 24 or less probably will be on the downside of the risk scale. He said only those in larger groups stand to get bonuses in this payment scheme designed to be “budget neutral” – that is government-speak for the losers will pay the winners.

In MACRA-economics 101, Marec advises physicians to do a few things to get ready now.

Get ready: Prepare with education, analytics and a focus on quality:

1. Educate. Providers need a firm understanding of their population health approach, robust productivity strategy, and an awareness that use of certified EHR technology is written into legislation.
2. Incorporate data & analytics. Annually, the amount of healthcare data grows by 48 percent. Clinicians need to think about how they are acquiring and aggregating the data they need to get the full view and manage the whole patient. 
3. Preplan and refocus on clinical quality. If not already part of an ACO, providers should put together an application for one of the CMS models. If you already have strong analytics, identify the areas you need to improve.

Be Ready Now

And, by the way, all this needs to be ready to go now.  Future reimbursements starting in 2019 will be based on physician performance in 2017 – a mere 7 months away.

The chances that anyone is really ready to play according to these rules is about as good as the chances that anyone was really prepared to get those tasty little Meaningful Use incentives. While MU technically goes away with these changes, the broad parameters regulating use of electronic patient records have made it into the MACRA rules.

Already, we are seeing some pushback from sectors in the provider community that felt they weren’t treated fairly under the Hospital Compare star rating system, delaying release of those ratings a few months while CMS reassesses its calculations. I’m just taking a guess that as these reimbursement rates are announced, other providers who end up on the losing side of the risk equation are going to assert a challenge to the way physician payments are calculated.

Already, some are saying pay-for-performance initiatives are set up to fail as reported in the last Health Wonk Review  because of the many and conflicting metrics. While HHS’ National Coordinator for Health IT Karen DeSalvo and AHRQ President Marilyn Tavenner held a joint presser discussing streamlining of quality metrics that you can read here, right now the urgency is on and providers are running hither and yon unsure which outcome to chase.

My prediction: prepare for legal challenges. The electronic health records needed to support stringent rules backing something as serious as payment are just not where they need to be. Without the solid data, clear benchmarking and reasonable outcomes that take into account the reality of caregiving in widely diverse regions with wildly diverse patient populations, quality- and outcomes-based payment just isn’t ready for prime time.