Is MACRA a True Doc Fix for Value-Based Reimbursement?

July 21, 2016 - Will MACRA be the answer to tying reimbursements to quality care or will it be just end up as another doc fix, like those under the Sustainable Growth Rate program?

A recent National Center for Policy Analysis report is critical of proposed MACRA provisions, stating the legislation would impose substantial burdens on clinicians by requiring them to abide by federal requirements and participate in specific alternative payment methods.

“Future regulatory and legislative reforms must do both more and less than the currently proposed rule does,” explained the author, NCPA Senior Fellow John Graham.

“They must reduce the role of the federal government in setting fees for physicians and determining what quality is, while continuing to move the locus of control to patients and doctors, by continuing to move away from paying for individual procedures toward paying for episodes of care.”

Graham identified overarching issues with the proposed MACRA legislation, including its lack of budget neutrality and the expansion of the federal government’s role in healthcare.

As it stands, MACRA would not reduce federal spending, which was one of the goals behind developing the legislation, Graham stated. MACRA would not be budget neutral because less than four percent of its increased spending provisions would be offset by other federal spending cuts, leading to a $141 billion increase in deficit within 10 years.

Under MACRA, the federal government would also be able to establish value-based measures and requirements for reimbursement. The report explained that this would cause providers to depend on the federal government for value-based payment, even though it is not part of the medical community.

Additionally, Graham pinpointed shortcomings of the Merit-Based Payment System (MIPS), which is one reimbursement track under MACRA. Most eligible clinicians will start with MIPS until they qualify for the more advanced track.

Through MIPS, eligible clinicians receive a Composite Performance Score that determines their payment adjustments for value-based incentives. The score is broken down into four components, including quality achievement (50 percent of score in 2019, 30 percent by 2021), resource use (10 percent), Advancing Care Information program (25 percent), and clinical practice improvement (15 percent).

However, the report stated that each category has significant issues that could increase burdens on clinicians and reduce their chances of success with value-based incentives.

The report explained that the quality achievement portion of the score is not different enough from the Physician Quality Reporting System, which has not been favorable among clinicians. Under the Physician Quality Reporting System, about 42 percent of eligible professionals neglected to report 2013 despite being financially penalized.

While the final list of quality measures under MACRA are scheduled to be released in November, Graham stated that the component’s similarity to the Physician Quality Reporting System is unlikely to generate more enthusiasm for quality reporting.

Further, Graham explained that “the federal government’s imprimatur to quality measures interferes with the practice of medicine (traditionally regulated by the states) and creates an illusion of unanimity in the medical profession that does not exist.”

In terms of the resource use category, the report stated that many eligible clinicians that have not already participated in an alternative payment method will struggle to decrease resource use.

Since the healthcare costs will be assigned to participants retrospectively based on the patients they treated during the performance period, some eligible clinicians may have trouble coordinating care for patients and reducing costs, Graham stated.

The exclusion of Medicare Part D claims in this scoring category also does not accurately reflect healthcare savings, explained the report. CMS would not assess prescription spending, which replaces more expensive medical care, such as hospitalizations, in some cases. The agency would not be able to see how higher prescription spending could lead to lower overall healthcare spending.

The report added that the Advancing Care Information component does not improve the burdens caused by its predecessor, Meaningful Use.

“Complying with previous criteria has proved increasingly challenging for physicians, and these new criteria are similar enough they do not address the challenges that have become apparent as EHR adoption has become institutionalized,” Graham wrote.

The report criticizes EHRs as “harmful to health professionals’ relationships with patients” because physicians must make time to demonstrate EHR use rather than connecting with patients.

Graham explained that clinicians are also not compensated for EHR investments, such as installation and maintenance costs, making EHR use incentives a “zero-sum game.”

Through the clinical practice improvement component, the report explained that it is the least cumbersome of the categories, but eligible clinicians would find shortcuts for earning the points for value-based incentives.

Eligible clinicians can either participate in three high-value or six medium-value clinical practice improvement activities as defined under MACRA. Graham explained that clinicians are likely to focus on finding the “lowest bars to jump over,” rather than selecting the most appropriate improvement activities.

To improve MACRA, Graham advised CMS to include Medicare Part D claims in the resource use category of MIPS, which would “better incentivize clinicians to prescribe appropriately to reduce overall resource use.”

He also recommended that CMS add more bundled payment models, which would more appropriately tie quality to reimbursement.

“Until the government allows prices to be determined by normal market forces, resources cannot be used effectively,” Graham wrote. “Although the statute does not jettison the fee schedule, the measurements of resource use imply clinicians should be paid for ‘bundles’ of care around diagnoses.”

While a final decision on MACRA is expected in the fall, CMS and providers may have more time to prepare for the new payment system. CMS indicated last week that it is open to delaying the start date of MACRA and it is considering feedback from stakeholders.

Dig Deeper:

• Top 5 Facts to Know about MACRA Alternative Payment Models

• MACRA Fee Adjustments May Generate Financial Consequence