Solving the MACRA Puzzle: Short-term Tactics and Long-term Strategies

Sg2, a Vizient company



Tawnya Bosko, DHA, Principal

Editor’s note: This post is adapted from an Expert Insight, originally featured on on Feb. 26, 2018.

There is no question that the Medicare Access and CHIP Reauthorization Act (MACRA) was needed. For those of us who lived through years of Congressional interventions to stop devastating yearly physician payment cuts, we were keenly aware that there had to be a better way. With MACRA, Congress set in motion far-reaching changes to physician payment. Is MACRA’s solution, with its Merit-based Incentive Payment System (MIPS) and advanced Alternative Payment Model (aAPM) tracks, the answer to our woes? Perhaps.

The legislation puts an end to the antiquated system of physician payment adjustments, combines the content of multiple programs under one umbrella, and facilitates essential conversations about the direction of health care delivery. Although its intentions were good, there are uncertainties and complexities surrounding its implementation. The Medicare Payment Advisory Commission (MedPAC), among others, has questioned the long-term viability of the MIPS track specifically and recommended that it be reworked or perhaps eliminated. Despite its known flaws, MACRA legislation has been touted as “the answer” to significantly advance value-based care.

As consultants focusing in alternative payment models, we spend significant time working with clients to design effective strategies that will allow them to survive (and thrive) in the transition to value while preparing them for success in more advanced risk-based models. It’s certainly complex and nuanced work. Here, I’d like to share our top three learnings from Sg2 Consulting’s MACRA-specific work in 2017 to help you prepare for 2018 and beyond.

1. MIPS is complicated. For the majority of physicians, MIPS was the track for 2017 and will continue in 2018, albeit with a reprieve for some. MIPS may sound simpler than an aAPM, but it is a complicated program containing innumerable scenarios and moving pieces. Optimizing a physician’s or a group’s performance requires a detailed understanding of the program rules and scoring methodology, careful attention to detail, and access to meaningful data. Decisions must be made regarding participation as an individual or group, what to submit, how to submit and how much to submit, with each decision impacting the next. We liken it to game theory, in which backward induction optimizes performance. The heavy investment in time and resources to succeed is often out of reach for many practices.

Here’s some advice:

  • Pay attention to benchmarks based on your submission methodology (yes, they differ)
  • Understand topped-out measures, i.e., those measures for which most are already performing well, which will eventually be transitioned out, while also selecting meaningful measures. Obtain physician buy-in regarding measure selection early in the process.
  • Take advantage of bonus points
  • Make sure to find the balance between managing the administrative burden and not falling victim to “just doing the minimum.” Although the “pick your pace” approach provided a cushion in the first program year, it’s important for practices to prepare for more robust submissions in the future.
  • Cost comes into play as one of the factors in MIPS this year, adding a new element for learning and consideration
  • Focus on the long-term vision

Given these complexities and considerations, health systems should use MIPS as an opportunity to communicate, align with and support not only employed physicians but also independent practices. We’ve worked with several health systems across the country who have done just that with great success. But, most importantly, selection of the quality metrics and improvement activities can facilitate the development of competencies needed to be successful in aAPMs.

2. Physicians are interested in aAPMs. While most physicians were in MIPS for the 2017 performance year, almost every physician with whom we have talked is interested in transitioning to the aAPM track that comes with a 5 percent lump sum bonus and reduces the administrative burden that is involved with MIPS reporting. Although the incentives are in place to support a significant shift toward these types of models, until recently, the number of available qualifying models did not provide many opportunities for specialists.

The release of the Bundled Payments for Care Improvement-Advanced (BPCI-Advanced) program provides an opportunity for more specialists to qualify for the aAPM track beginning in performance year 2019. This is a welcome addition, given that most other aAPM options to date have been more primary care and population based in nature (Medicare Shared Savings Program [MSSP] Tracks 1+, 2, 3, Next Generation and CPC+ as examples). The deadline is tight, however, with applications being due by March 12, 2018.

Recall that we started this section by saying that “physicians are interested in aAPMs.” An intriguing caveat of the BPCI-Advanced program is that physician group practices can be episode initiators and CMS has given them precedence in the program. What does this mean? Physicians can, and some will, do this without you. Again, use this as an opportunity to align with your physicians and create your future-focused strategy for aAPMs.

3. Structure and participants in your aAPMs matter. In order to qualify for the aAPM track, entities or physicians must have either 25 percent of their Medicare payments or 20 percent of their Medicare beneficiaries flowing through the alternative payment model in 2018. This threshold can be difficult to achieve based on the structure of the aAPM(s). We have worked with many organizations across the country that have entered MSSP aAPM eligible tracks, or even Next Generation ACO, only to find out that while the model qualifies, the make-up of their ACO entity will not allow them to meet these thresholds.

Under the MACRA rules, aAPMs with a participant list (MSSP programs and Next Generation) are assessed at the ENTITY level with regard to the payment and beneficiary thresholds. So, the entity either qualifies as an aAPM, or it doesn’t. Those aAPMs without a participant list (Comprehensive Care for Joint Replacement, BPCI-Advanced) are assessed at an individual level.* We expect MACRA strategy for both employed and community physicians to be a serious consideration for health systems that are considering BPCI-Advanced or Shared Savings Program applications this year.

Employ a defined strategy for aAPM participation

This year marks another year of transition for MACRA. With the announcement of BPCI-Advanced, 20 initial participants in the MSSP Track 1+ program and 14 new Next Generation ACO participants, the numbers of aAPM models available and participants meeting those tracks are continuing to grow. Performance year 2019 introduces the all-payer combination option, bringing with it increased opportunity for aAPM qualification.

As we move from predominantly MIPS to increasing aAPMs, most systems will need to have a portfolio of different risk-based products and understand how they interact. Until now, testing different models has been a somewhat safe approach. Moving forward, a defined strategy for aAPM participation will be necessary, along with coordination across all payers and strategic alignment with physicians.

If you need help making sense of the alphabet soup that is MACRA, contact Sg2 today.

*The BPCI-Advanced program has different QP determination rules for Physician Group Practices and Convener Participants.

About the author and Sg2. Drawing upon 20 years of experience in health care management and strategy, Tawnya Bosko collaborates with health systems and payers to develop innovative and detailed plans for future growth. She has advised clients on strategies for mergers and acquisitions and the development of clinically integrated networks, for provider-owned health plans, and for enabling organizations to transition to value-based payment and evolving delivery system structures. Sg2’s analytics-based health care expertise helps hospitals and health systems integrate, prioritize and drive growth and performance across the continuum of care.

Sg2 Consulting Director Kristin Oberfeld contributed to this post.

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