1. MACRA: Using Data to Capture the Quality
Mark Blessing, CPA, FHFMA, Managing Director
Zach Remmich, Managing Consultant

2. 1 2 3 Roadmap MACRA Overview
Key Elements Affecting Reimbursement in Value-Based Environment 3
Engaging Physicians Using Data Analytics

3. Why MACRA is Important Eliminated sustainable growth rate (“doc fix”):
Locks clinician payment rates at near zero growth
Phased out current Medicare physician payment programs:
Physician Quality Reporting System; Value-Based Modifier, Meaningful Use
Created two new physician incentive programs:
Merit-based Incentive Payment System (MIPS)
Advanced Alternative Payment Models (Adv APMs) – MACRA term
Program incentivizes participation in value-based, coordinated care models requiring EHR utilization

4. MACRA Participation – Year 2 Outlook
MACRA 2018 – CMS slow walking implementation
Merit-Based Incentive Payment System (MIPS)
Quality, Cost, EHR, Improvement Activities
More providers excluded
Low volume threshold increased
More participation in APMs
Additional scoring and reporting flexibility
Advanced APMs
5% annual bonus
Advanced APM track criteria unchanged
More models included (MSSP Track 1+)
2018 MIPS Scoring

5. Medicare Spending per Beneficiary
2018 MIPS Cost Measures
Total Cost per Capita
Specialty-adjusted measures that evaluates overall efficiency of care
Includes Medicare Part A and B
Attribution based on largest share of primary care services provided or specialist if beneficiary didn’t visit a PCP
Medicare Spending per Beneficiary
Cost of Medicare Part A and B services during a 30 day episode
Not adjusted for specialty
35 case minimum or no score
Attribution based on plurality of Part B claims during inpatient stay

6. Macra implications
MACRA five-year reimbursement risk on stand-alone basis likely less than cost of infrastructure required to fully maximize reimbursement effect
Efforts to maximize MACRA reimbursement effect could have opposite (& potentially more material) downstream reimbursement effects for various providers in FFS environment
Practices need the necessary infrastructure & expertise to manage data reporting, care coordination & clinical outcomes before taking on payment risk
Total cost of care management for Medicare beneficiaries likely to be a significant differentiator

7. Key Elements Affecting Reimbursement in Value-Based Environment

8. Historic: Fee for Service Reimbursement
Clinical procedure performed = add’l reimbursement
Profitability considerations:
Add’l expense of procedure offset by add’l reimbursement
Since reimbursements typically exceed direct expense of procedure, performing MORE procedures &/or HIGHER INTENSITY procedures helps cover indirect (overhead) costs
CPT procedural code drives reimbursement as opposed to ICD-10 diagnosis codes
Medicare DRG reimbursement is largest historic example of non-FFS reimbursement – what was its effect?
Significantly reduced average lengths of stay
Significantly increased diagnosis coding efforts

9. Value Based Reimbursement
Patient episode = additional reimbursement
Patient episode definitions vary greatly, but basic way to define:
For Primary Care, attributed beneficiary total care for medical issues (Capitation)
For Specialists, referred beneficiary total expenditures for a specific issue, for a specific time after an initiating event (Bundle)
Reimbursement adjustments for “Value”:
Patient HCC Score: Higher score, higher reimbursement (“sicker”)
Quality & Outcomes: Higher score, higher reimbursement (“better care”)

10. Value Based Reimbursement
Continued…
Profitability considerations:
Clinical procedure performed – no additional reimbursement
Since no additional reimbursement, performing FEWER procedures &/or LOWER INTENSITY procedures helps profitability because of saved direct costs for procedures
ICD-10 diagnosis codes drive reimbursement as opposed to CPT procedural codes because of effect on HCC Score

11. How are Clinicians Being Affected
Different flavors of CMS initiatives
Accountable Care Organizations (ACO)
MACRA
Bundle programs (BPCI; Comprehensive Joint Replacement, etc.)
Medical Home models
Many others
Commercial insurers are beginning to come along with Medicare

12. How are Clinicians Being Affected
Continued…
New abilities become more important to profitability as VB reimbursement percent of business grows:
Diagnosis coding (HCC code effect)
Management of episode claim costs across all providers
Management of quality & outcome measures
What are organizations doing to develop & implement the above abilities?
Case management (control episode costs for high expense patients)
Clinical protocol development (control episode costs)
Coding initiatives such as AWV process (properly reflect HCC Scores)

13. Engaging Physicians Using Data Analytics

14. Engaging Physicians Using Data
The transition from FFS to value-based care can be summed up in two words: risk transfer
Multiple ways payers are transferring risk to providers:
Episodes of care (bundled payments)
ACO/MSSP
Hospitals must begin to think like insurance companies in terms of managing risk

15. Engaging Physicians Using Data
Clinical decision making becomes key financial driver- new business model
Standardize care, lower unwarranted variations, focus on complications and readmissions, drive down cost (Medicare and internal)
Must have management systems in place to gather, analyze and share data with physicians
Physician salary constitutes 20% of health care spending but the decisions they make influence an additional 60% of spending¹
What about small, rural hospitals with only one specialist? Incenting n=1

16. Developing a Physician Collaborator Strategy
Analyzing data for variation and impact
Identify high-level systemic care redesign needs
Identify collaborator quality guidelines
Integrate leadership physicians in strategy process
Gauge current level of interest
Consider how their practice will be affected
Evaluate potential internal cost savings
Compliance (FMV, Stark, IRS excess benefit)

17. Engaging Physicians Challenges you may face
Development challenges (Multi-group, employed and independent)
Consensus on protocols and standardization
Skepticism in data and measurement
Concern with clinical decision making
Perception of profit-sharing
Lack of trust
Establishing trust with physicians
“Above all, success in business requires two things: a winning competitive strategy, and superb organizational execution. Distrust is the enemy of both. I submit that while high trust won't necessarily rescue a poor strategy, low trust will almost always derail a good one.” Stephen MR Covey, The Speed of Trust

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