Healthcare

In our blog last week on the October 14, 2016 MACRA Final Rule with Comment Period (Final Rule), we began a series on topics of interest from the Final Rule, particularly those representing departures from the Proposed Rule, to summarize the decision in the Final Rule.

MACRA repealed the much maligned Sustainable Growth Rate (SGR) formula and replaced it with the Quality Payment Program, made up of two avenues to reward delivery of high quality patient care: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs).

With the release on October 14, 2016 of the Final Rule with Comment Period (Final Rule) for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), titled Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models [CMS-5517-FC], the healthcare industry received some much-awaited clarity around the May 9 Proposed Rule.

When Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), “risk” moved front and center as a feature of provider reimbursement models. These days, we’re using terms such as “at risk” and “risk-based” more and more, but what do they really mean? And why should healthcare providers be more concerned with risk now than they have been in years past?

Shared savings arrangements began as a key component of the Medicare delivery system reform initiatives included in the Affordable Care Act, the intent being threefold: to generate better care for individuals, to generate better health for the population, and to lower growth expenditures. To participate in a Medicare shared savings arrangement, eligible providers and suppliers are required to form an accountable care organization (ACO).

In a move that was widely applauded by medical groups such as the Medical Group Management Association, the American Medical Association, and the American Academy of Family Physicians, CMS announced that it is making the start of MACRA implementation more flexible next year. Although the performance evaluation period may be delayed, the start of payment changes will not be delayed.

The introduction of the dual track Quality Payment Program within the MACRA proposed rule has many healthcare systems considering their options. My most recent blog focused on the MIPS track of QPP, so today I will focus on an overview of Advanced Alternative Payment Models. 

Think back to your last car, truck or SUV purchase. What did you want to know before spending so much money?

More than likely, you wanted to know the price range of the type of car you were considering. You might have wanted to know what features were standard on different makes and models. You might even have identified one or two features that you couldn’t live without, and that helped you narrow your choice. You aIso might have wanted to know where to find the best financing. If you’re tech savvy, you probably found much of the information you needed online—even in a single app or website. In recent years, our collective consumer needs have changed the way we buy cars. In fact, consumer preferences have changed the way we buy most things—even healthcare.

CMS released a proposed rule on April 27^th which specifically addresses the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive as components under the Quality Payment Program. The Medicare Access and CHIP Reauthorization Act of 2015 repealed the Medicare sustainable growth rate over a year ago, but to date, the recently released proposed rule provides the most concrete guidance on the likely trajectory of physician payment under Medicare Part B for the next decade. While receiving such information is important and exciting for market participants, frankly CMS did not leave much time for physicians and health systems to consider this information, update strategic plans and execute accordingly. That’s because the first performance period begins in less than seven months on January 1, 2017.

If anything has disrupted the business of healthcare delivery in recent years, the transformation of reimbursement from volume to value ranks highly. Whether and to what degree we accept this reality varies among providers and facility executives, but disruptive change is either coming or has arrived. Some markets may be less sophisticated than others, with some seemingly a few years to a decade behind, but if CMS has any input—which it does—market timing in value-based reimbursement will soon shrink dramatically.

Although physicians around the country cheered the permanent repeal of the sustainable growth rate (SGR), the resulting reimbursement and payment model changes could significantly impact the fair market value of physician practices. The passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) changed the valuation environment significantly. The HORNE Healthcare team has been researching the changes, and here is what you need to know: