Provider preparation for MACRA represents a distinct opportunity for organizations to establish an integrated strategy for Senior Markets that includes Medicare Advantage (MA).
Is your organization MACRA ready? If so, you have probably invested significantly in infrastructure, innovative policies and procedures focused on care management, and consumer engagement strategies. MACRA is here to stay, but have you considered the broader Senior Market opportunity? The number of seniors is substantial and continuously growing; synergies across Senior Markets may exist. By looking through the MACRA lens, you may see potential for Medicare Advantage (MA); MACRA capabilities being built today are highly transferable, offering the opportunity to take a more holistic portfolio approach to the Senior Market.
MACRA: Medicare Access And CHIP Reauthorization Act of 2015
CMS recently issued a proposed rule for MACRA’s CY 2018 Quality Payment Program. This proposed rule focuses largely on simplifying the program and providing additional flexibility for participation. Contact us for further insights or download full text from the Federal Register here.
Although Republicans and Democrats continue to have conflicting views related to many healthcare reform topics, MACRA has bipartisan support, enacted by Congress through a House vote of 392-37 (212 Republicans and 180 Democrats) and a Senate vote of 92-8 (46 Republicans and 44 Democrats). This consensus suggests that MACRA will continue during the Trump Administration—it also replaces arguably one of the most unpopular physician payment mechanisms (the sustainable growth rate or “SGR”), which required annual “Doc Fix” legislation by Congress in order to achieve equitable physician payments during much of the last ten years.
It is widely recognized that the transition from FFS payments to payment for quality and value imposed by MACRA is critical to the sustainability of the healthcare system. As such, we believe that changes made by the Trump Administration during its regulatory roll out are unlikely to significantly change MACRA’s goal; extensions in the timeline or modifications to the options for participation are most likely. The MACRA CY2018 Quality Payment Program proposed rule recently issued by CMS does provide additional flexibility for participation as well as further exclusions. CMS estimates that approximately 65% of Part B charges will continue to remain in the program.
As a result, organizations have begun to make significant investments in preparation for success in the post-MACRA environment. The majority will participate via the Merit-Based Incentive Payment System (MIPS) track, creating a footrace of provider and health system peers to capture bonus payments based on performance in four defined categories. MIPS participants will now be focused on: identifying gaps in technology infrastructure, building more effective and efficient population health and care management approaches, and creating more robust and meaningful patient engagement capabilities to ensure long-term loyalty with their consumers.
Still, other providers will select to participate via the Advanced Alternative Payment Model (APM) track, resulting in additional focus on the analytics and risk stratification capabilities necessary to take on downside financial risk and succeed. Not surprisingly, MACRA is driving an increase in ACO and other APM models; between Q1 2016 and Q1 2017 the market experienced 11% growth of ACOs alone, according to recent Health Affairs analysis of the Leavitt Partners ACO Database commissioned to track the growth of accountable care. As these models become more prevalent, we believe that it will be critical for providers to ensure alignment of the capabilities necessary to succeed under each payment model and begin to leverage synergies.
As organizations assess their capabilities under MACRA, they should also consider potential applicability to MA and across the entire Senior Market spectrum. While initially such a transition may seem challenging to many executives, there is an opportunity to leverage MACRA and MA synergies as a meaningful way to enhance growth and broaden the clinical service infrastructure within the enterprise. We encourage organizations to incorporate this view into their short and long-term strategic assessment and planning efforts; in effect, look through a MACRA ’lens’ to see the potential of MA in their marketplace. MACRA capabilities being built today are highly transferable, offering the opportunity to take a more holistic portfolio approach to strategic planning and resource deployment.
In order to comply with MACRA, provider organizations are building a set of core competencies that can also well position their organizations to participate in MA as a participating provider, through risk-based MA contracts, or even as a provider-sponsored MA plan.
For illustrative purposes, organizations can contemplate how well the full set of MACRA measures (which are more expansive and detailed) correlate to those historically used by the MA program. Steps can certainly be taken to align the performance measures that physicians will be tracking through MIPS with MA Star rating strategies.
|Organizational Capability||MACRA & MA Performance Capabilities||HealthScape Observations|
|Investment in Technology||Significant infrastructure investments are most often better spread across multiple programs, especially those with strong synergies.|
|Care Managemen||Effective management of patients with five or more diagnosis is critical. Organizations are beginning to leverage team-based and cross-environmental approaches to care that have been a part of historical care management efforts within special needs plans.|
|Other Clinical Practice Improvement Activities||Transparency and practitioner awareness of improvement opportunities are key to achieving advances in performance for all senior programs.|
|Consumer Engagement||Healthcare organizations need to continue to engage consumers and their families on all aspects of care, including ongoing wellness, medical, behavioral and financial health.|
|Patient Risk Assessment & Management||The ability to accurately capture this information and integrate it into provider workflows is a critical component of risk management. Ineffective documentation that leads to inaccurate risk coding and capture can have a profound impact on an MA plan’s payment levels and exposes organizations to potential fraud and abuse concerns.|
Please note: This chart does not represent an all-inclusive list of capabilities necessary to succeed under MACRA or in MA.
HealthScape believes that MACRA should be the stimulus that drives provider organizations to develop an integrated senior strategy, focused on attracting a particular patient population within a predetermined mix of senior programs. MA should be a part of this portfolio mix.
The Medicare market represents a significant portion of the overall population and is continuously growing. The Congressional Budget Office estimates that there are approximately 58 million Medicare beneficiaries of all ages in 2017, growing to over 75 million in the next ten years as Boomers continue to age into the program – approximately 10,000 Boomers turn 65 each day. As a result, Medicare enrollment is rising at a rate not seen in history of the program, greater than 6% annually, which will continue for the next 13 years. More important for strategic consideration is the fact that one in three beneficiaries across the nation is enrolled in MA, and in some states, MA penetration is greater than 50%. These highly penetrated states are still experiencing consistent growth, signaling that the MA saturation point has not yet been reached.
In addition, MA growth may be accelerated by several key factors:
HealthScape recognizes that a one-size fits all Senior Market solution does not exist; organizations should evaluate core competencies, patient mix, and existing relationships in order to arrive at an action plan. We believe that the optimal view of how to succeed under MACRA or under MA must be informed through an evaluation of a provider organization’s patient portfolio across all Senior Markets, as synergies exist. Commit to this portfolio evaluation and consistent re-evaluation, since strategy may evolve over time with changes in market factors or appetite for risk.
While the primary focus of MACRA is on physician reimbursement, heath plans should not ignore the more wide-reaching impact of this legislation; health plans benefit from understanding MACRA’s impact on all market players and from working with provider network partners as a part of their strategic response.
The implications of MACRA’s two participation tracks (MIPS vs. APM) may drive greater provider interest in downside risk arrangements. Specifically, the implications of the All Payer Options (beginning in the third performance period 2019, payment year 2021) will allow providers’ value-based payment models with health plans to count towards APM participation. This option may cause providers to actively seek out value-based care arrangements with a risk sharing component, especially as they try to most efficiently leverage the capabilities that they are building for MACRA. Additionally, health plans may see greater interest from provider partners in MA in order to mitigate exposure to MACRA FFS reimbursement provisions.
Regardless of strategic approach, MACRA creates opportunities for health plans to work more proactively with their network partners on a value-based payment strategy that supports providers’ strategic response to MACRA and the Senior Market as a whole. Such alignment would include structuring these agreements to align quality, care management, cost, and other contract requirements with the competencies being built to succeed under MACRA and to participate in MA. By working together, health plans and providers can create a mutually beneficial model that addresses the greatest possible portion of a provider’s panel, resulting in efficiencies, better compliance, and improved quality and cost outcomes.
The post-MACRA market presents unique Senior Market opportunities. Providers are uniquely positioned to use multiple levers in order to optimize growth and financial performance across their Senior Markets. HealthScape can help. For more information, contact Cary Badger at (206) 849-9437 or firstname.lastname@example.org.