Reprinted from HEALTH PLAN WEEK, the most reliable source of
objective business, financial and regulatory news of the health insurance
industry.
August 1, 2016 Volume 26 Issue 27
Health insurers are not quite looking over the shoulder of
physicians and provider groups when it comes to the Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA), but they certainly are attuned to how this
possibly game-changing legislation will be implemented when CMS releases a
final rule on the statute, expected around Nov. 1. Vendors and health plan
consultants tell HPW that what is fundamentally a law to
promote new payment schemes by incenting physicians and health systems to
enable more efficient and quality care has a definite spillover impact on
carriers.
The law, which replaced the Sustainable Growth Rate (SGR) model in
spring 2015 (HPW 2/15/16, p. 1), is on the face of it a real
disruptor of the traditional fee-for-service (FFS) revenue model. MACRA
provides a 5% annual bonus for the small percentage of medical providers who
participate in Alternative Payment Models (APMs), risk-bearing coordinated-care
models that move physicians away from FFS. Under MACRA, provider groups can
qualify if they take downside risk for at least 25% of their payments (the 25%
figure will increase to 50% in 2021).
MACRA also created the Merit-Based Incentive Payment System
(MIPS), which administers bonuses or penalties based on how well physicians
perform relative to other physicians on a complicated set of quality and value
measures.
And although some of the deadlines and start dates seem far off,
starting on Jan. 1, 2017, physicians’ and other providers’ performance will
determine their future payment rate updates. Because of the time required to
gather and evaluate performance data, spending and other performance measures in
calendar year 2017 will provide the basis for physician payments in 2019.
For those vendors active in the health insurance space, the advent
of MACRA has brought opportunities to offer carriers new tools to manage APMs,
according to Ray Desrochers, executive vice president and chief marketing
officer for HealthEdge. The 11-year-old company markets software centered on
providing a next-generation core administrative platform to the health insurer
market.
“There is a tremendous amount of anxiety right now as everyone
seems to realize that the one-size-fits-all version of health care that we have
all known and loved is indeed going to be replaced by some number of these new
health care business models,” he tells HPW. “But many of these
execs really just don’t know how they are going to get from where they are
today to where they think they need to be tomorrow.”
For payers, Desrochers says, it is important to really look at
MACRA as more than just a law for the Medicare population. “At the end of the
day as you read through the rule, you quickly realize that the folks who are
participating are actually going to be incented as well for good behavior for
their Medicaid and even their commercial populations as well,” he explains. “We
believe that what is going to happen as a result of this is that the folks who
are participating, since the Medicare business tends to be some of the lowest
margin business that they deal with, are really going to want to take advantage
of their other populations to try and increase their scores. And in doing so, I
think you are going to start to push some of these new models on the health
plans.”
This could result in providers setting the pace on new payment
models and possibly leaving plans behind on the technology front. Desrochers notes
that most claims management software in place now was designed for FFS. “So now
when you start talking about something that is truly variable [like APMs], and
can be variable in a number of different directions and based on scores, I
think health plans are getting nervous about this. But they are also starting
to dig in and figure out what it is going to mean for them and how they will
need to adapt [by updating systems] to be competitive in this new marketplace,”
he continues.
Updates Are Complex Change for Plans
The situation is not unlike the rollover to ICD-10 in recent
years (HPW 10/12/15, p. 6), but as that update caused so much drama
for stakeholders, it also should be remembered it was a relatively simple
technological fix, sort of a Y2K problem as computers rolled from 1999 to 2000,
Desrochers says. “What is going to happen this time is they [health plans] are
looking at something they are going to view as far more complex than that. We
are not just transforming data and allowing data to be more complex. We are
actually going to be changing some of the inner workings of these health plans
from the standpoint of introducing a new level of variability that dramatically
and exponentially increases the complexity of what they are dealing with,” he says.
For the last 40 years, most health insurers’ IT platforms have
been based on a simple configuration model that allows for limited variation —
and for most part those systems have been very good at the various FFS models,
Desrochers says. But MACRA and the push to value-based payment models in the
broader sense is forcing health plans to make payments in a very different way.
HealthEdge, at a cost of some $200 million, built an English-like,
health care-specific language that allows people within the plan to pretty
quickly and easily configure all of this variability, Desrochers says.
Exactly when MACRA is going to be up and running is not certain,
however. Although there is some scuttlebutt in Washington about CMS delaying
the implementation of MACRA, Anne Phelps, principal and U.S. health care
regulatory leader for Deloitte LLP, tells HPW the situation is
likely more nuanced. “I wouldn’t use the word delay because many of the
deadlines are set in statute, but CMS has a lot of regulatory leeway or ability
to…offer some transition time, or potentially they could say the first three to
six months are sort of practice or a good faith period,” she says.
There also could be caveats and exceptions added to the
implementation process, like more time for rural or small practitioners to get
on board. Reflecting this thinking, CMS acting Administrator Andy Slavitt told
a Senate Finance Committee hearing on July 13 that the agency is open to
multiple approaches on MACRA implementation timelines, including alternative start
dates, shorter reporting periods and other measures to give physicians and
clinicians the know-how to get with the program.
Paul Ginsburg, Ph.D., director of public policy, Schaeffer Center
for Health Policy and Economics at the University of Southern California,
tells HPW that allowing more time for doctors and providers to
prepare is something CMS should strongly consider. “Physicians clearly are
entitled to more time. They have to wait for a rule that will come out in, say,
November of this year and starts being effective in January. That does not seem
very realistic,” he says.
Small Physician Practices Could Crumble
Despite the promise of MACRA and the ongoing move to value-based
payment models, Ginsburg has reservations. “The more I look into it [MACRA],
the more concerns I have. This is a very disruptive law, “ he explains. Rather
than accomplish what the law set out to do — attract physicians to APMs and
diminish the role of FFS — the proposed rule has not allowed a clear path for
physicians to achieve bonuses and the explanations in the draft proposal have
left many stakeholders concerned about what comes next.
Ginsburg is concerned that CMS has placed too much focus on the
MIPS part of the statute, which could be a big detriment to smaller physician
practices. “Under MIPS, the bonuses and penalties are very large, and it is a
very difficult thing for small practices to do well under MIPs. This leads to
the concern that a lot of physicians will throw in the towel and beg hospitals
to acquire them,” he says. There is also the lag time between performance
reporting that starts next year and the bonus/penalty phase in 2019. “A
physician may think they are performing well, but don’t know how peers will
perform. This creates two years of uncertainty on how they are doing before
they find out,” Ginsburg says.
How this all affects health plans, in his view, is that on the commercial
side the larger physician practices and clinical groups could get larger and
leave carriers with less leverage in contract negotiations as the little guys
slide away. “For insurers the real interest in MACRA is making sure MACRA keeps
small practices viable,” Ginsburg adds.
https://aishealth.com/archive/nhpw080116-02?utm_source=Real%20Magnet&utm_medium=email&utm_campaign=113700882
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