Part 2: The Strategic Implications of MACRA

Part 2 of the Successful Health and Wellness MACRA article series explores the strategic implications of the MACRA legislation

The passage of MACRA guaranteed an imminent transition to value-based care that will impact most, if not all, clinicians. As a result, the clinical behavior that has fostered success under a fee-for-service payment model will no longer be sustainable. Amidst all the uncertainty surrounding healthcare reform, MACRA is here to stay. Clinicians and hospitals must determine what their future strategy will be in response to the legislation. While MACRA driven change is something clinicians can’t avoid, employed and independent physicians remain unaware of the law and its implications for their practices.

The Deloitte Center for Health Solutions 2016 Survey of U.S. Physicians found that 21 percent of self-employed or independent physicians say they are somewhat familiar with MACRA, compared to nine percent of physicians employed by hospitals, health systems, or medical groups.[i] Because of the low level awareness and understanding, an organization’s MACRA strategy must begin with clinician education. To do so, organizations can leverage the different methods of Continuing Medical Education (CME) that have historically been effective for ensuring knowledge acquisition and retention among providers.[ii] Studies have found that in-person multi-media education sessions are a more effective method for teaching new information than print media.[iii] As such, hospitals have a responsibility to provide education for their employed and aligned physicians to improve their understanding of MACRA and its impact on the clinical enterprise. For providers participating in MIPS, a starting point for education should be their reporting options in 2017. There are three reporting options available in 2017, based on an individual physician’s current state ability to participate:

  • Option #1: Report for a full 90-day period, with an option to report for the full year, in order to maximize the provider’s opportunity to qualify for a positive payment adjustment. This option includes reporting on the full set of measures in MIPS.
  • Option #2: Report for a full 90-day period, with an option to report for the full year. In this option, providers are required to report on only one quality measure, more than one clinical practice improvement activity, and more than the minimally required advancing care information measures. By participating in this option, providers are guaranteed to avoid a negative payment and retain limited potential for a positive payment adjustment.
  • Option #3: Report on one quality measure, one clinical practice improvement activity, and one advancing care information measure. Providers participating in this option are guaranteed to avoid a negative payment adjustment but will not be eligible for a positive payment adjustment.

These education sessions should be arranged as soon as possible, because their performance in the current year (2017) will impact their payment in 2019.

In addition to general education, hospitals and physicians can work together to understand how performance under current value-based programs can act as an indicator of future performance under MIPS and Advanced APMs. Hospitals can provide resources to help physicians review and interpret their Quality and Resource Use Reports (QRURs).  QRURs demonstrate physician performance on quality and cost metrics in existing value-based programs, such as PQRS. By understanding current performance, clinicians and organizations can work side by side to strategically select the quality metrics that will maximize their MIPS quality performance score or identify opportunities for performance improvement in Advanced APMs.

To truly succeed under MACRA, an organizational strategy must address and provide support in the following functional areas:

  1. Planning and modeling financial implications and needed investments under MACRA;
  2. Identifying necessary capabilities for new reporting requirements;
  3. Identifying necessary capabilities for bearing increased financial risk;
  4. Exploring multiple options for physician alignment, ranging from employment models to network relationships; and,
  5. Implementing change management strategies and managing cultural shifts.

The lack of resources in these core functional areas are driving a sense of concern in the physician community, leading many to consider the possibility of joining larger organizations. As a physician-focused program, the QPP creates an immediate need for physicians to seek alignment opportunities with hospitals to create larger, more integrated organizations. In the survey by the Deloitte Center for Health Solutions, 58 percent of physicians said they would opt to be part of a larger organization to reduce increased individual financial risk and gain access to supporting resources and capabilities. Additionally, 39 percent of physicians reported they would be more likely to accept risk-based compensation if they were part of larger organizations that lowered individual risk, and 36 percent reported they would be more likely to accept risk if they were part of an organization that provided a full spectrum of resources for all clinical and nonclinical activities.[iv]

These survey findings suggest that clinicians understand that a larger organization is more equipped to provide the resources and support necessary to maximize performance under MACRA and other value-based payment arrangements. Independent clinicians will likely sacrifice a level of autonomy and independence when becoming more closely aligned with a hospital. The sacrificed autonomy is not without gain, as both hospitals and clinicians can gain from being more closely aligned. Benefits to the clinicians include the ability to gain access to centralized administrative resources as well as support in managing increased financial risk.  Physician employment can be a costly investment for hospitals, but it allows a hospital to participate in shared goal setting while presenting an opportunity to increase market share through increased influence on referral patterns and physician compensation design. Direct employment of clinicians is not the only method of alignment to choose from. Hospitals and clinicians can consider forming an Accountable Care Organization (ACO) or a Clinically Integrated Network (CIN). Both ACOs and CINs offer an independent clinician some of the support provided through direct employment, while maintaining a larger level of autonomy.

The alignment decision does not impact whether a hospital or clinician chooses to participate in the QPP as a MIPS provider or in an Advanced APM, however it will likely impact a clinician’s performance.  A clinician must decide what level of support they need in the key functional areas of a MACRA strategy, as there is no one-size fits all solution. Part 3 in the MACRA article series will explore the different alignment options available.

[i] Elsner, Natasha; Gerhardt, Wendy; Morris, Mitch; Phelps, Anne. Are physicians ready for MACRA and its changes? Perspectives from the Deloitte Center for Health Solutions 2016 Survey of US Physicians. Accessed November 21, 2016.

[iii] Davis, Dave; Galbraith, Robert; American College of Chest Physicians Health and Science Policy Committee. Continuing medical education effect on practice performance: effectiveness of continuing medical education: American College of Chest Physicians Evidence-Based Educational Guidelines 2009 Mar; 135(3 Suppl): 42S–48S. doi: 10.1378/chest.08-2517

[iv] Elsner, Natasha; Gerhardt, Wendy; Morris, Mitch; Phelps, Anne. Are physicians ready for MACRA and its changes? Perspectives from the Deloitte Center for Health Solutions 2016 Survey of US Physicians. Deloitte Consulting. 2016.