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MACRA Continues to Catalyze Movement Towards Value
January 17, 2018

MACRA Continues to Catalyze Movement Towards Value

Founded in 1998, The Health Management Academy is a peer-to-peer learning and leadership development organization comprised of executive members from the country's largest integrated health systems and a strategic balance of the industry's most innovative companies. The Academy is a knowledge source for identifying and monitoring tactical and strategic issues, with educational programming that assesses the top priorities of its members, monitors the organization and development of large health system executive teams, and facilitates structured interaction among its health system members. Peer-focused, problem-solving based programs—where the latest Academy research, policy analysis and expert views on the issues driving healthcare are analyzed and discussed—create the foundation for developing the leadership strategies and skills needed to strategically guide critical health system decisions.
This article was co-authored by Sanjula Jain, of Emory University in Atlanta, Georgia, and Medha Vyavahare and Jarrett Lewis, both of The Health Management Academy in Alexandria, Virginia.

Last November, CMS released the final Quality Payment Program (QPP) rule for 2018 under the Medicare Access and CHIP Reauthorization Act (MACRA). The rule increases the low-volume threshold for the Merit-based Incentive Payment System (MIPS) and will score clinicians on the cost of providing care. The increased exclusions limit both penalties and bonuses for high performers while increasing the competitiveness of the program. Moreover, the inclusion of cost makes alignment and dependency between healthcare providers crucial, given their joint responsibility in contributing to a patient’s total cost of care. The regulatory burden of MACRA for clinicians, especially for small practices and independent physicians, has led many to turn to large integrated health systems for infrastructural support for reporting and program compliance.

Large integrated health systems have been particularly ambitious in embracing the transition to value-based care, with many concurrently participating in multiple risk-based models with Medicare and other payers. Their experience in transitioning to risk has partially sheltered large health systems from the disruptive force of MACRA. Even so, MACRA has presented providers with many new implementation challenges shaping an evolving response to payment reform. Large health systems’ approach to MACRA has shifted over time—in 2016, health systems were focused on educating clinicians and leadership teams about the new changes to payment, whereas in 2017, health systems were more focused on conducting gap analyses and long-term planning to prepare for full-scale execution. Given that 2018 marks the last year of the transition-year policies, implementation challenges identified during the first 2 years of MACRA preparation and execution must be addressed to ensure effective delivery of high-value care as intended.


The Health Management Academy convened executives—population health directors, medical directors, accountable care, corporate finance, and informatics/technology officers—of 21 leading health systems to discuss the implications of the Final QPP Rule for 2018. Health system leaders shared key challenges and areas of success in the implementation process, focusing on how MACRA is influencing their organization’s overall transition from volume to value.

The prevailing uncertainty about the permanence of the MIPS track and sustainability of current alternative payment models (APMs) has led systems to proceed cautiously when engaging in new value-based initiatives for the fear that new investments may provide little return. Even so, many large systems have made significant investments in restructuring internally to provide coordinated oversight in implementing MACRA to optimize performance. System leaders have also employed physician engagement strategies, such as providing relevant data to physicians, assuming the reporting burden, and structuring gainsharing agreements to credit physicians for achieved savings in complying with the program. While the need for stability and transparency at CMS remains paramount in provider commitment to continue to shift towards value and meaningfully fulfill MACRA’s legislative intent, health systems must continue taking steps in line with the QPP to improve quality and control costs.

Providers recognize the value in using data-driven insights to understand performance, make strategic decisions around measure choice, and communicate with physicians.

Data continue to drive the MACRA conversation. Data-driven insights afford providers the benefit of sharing data with physicians to incentivize better performance while simultaneously leveraging historical data at the systems level to prepare for future scoring and identify high and low performers. Although health systems recognize that data are the key to predicting and preparing for scoring under the QPP, many find that the current data infrastructure has not prepared them to meaningfully measure priorities like total cost. Systems expressed frustrations regarding the magnitude and particularities of their data collection effort, and believed there remains an ambiguous division of responsibility between vendors and health systems in the provision of the data infrastructure. Many were overwhelmed by the flood of data being collected, from which they felt they derived little strategic value. Given the multitude of payers and electronic health record (EHR) systems in place—each with their unique quality metrics and reporting requirements—health systems are still exploring how best to integrate and make actionable the data they are receiving.

In the interim, health systems are trying to identify ways to analyze patients across care pathways. These micro-level analyses would allow health systems to delineate between legitimate and influential sources of clinical variation. Gauging whether a low performance outcome is attributed to patient acuity (legitimate) or is the result of poor care delivery (influential) is essential to improving quality. Likewise, as systems continue to identify and pilot different quality improvement strategies, they must be able to understand the financial impact of these changes. While health systems have recognized the need for patient-level clinical analyses and financial mapping, the current state of the data infrastructure and technologies remain inadequate to do so. Accordingly, a handful of systems are exploring third-party technology solutions to integrate such capabilities into their existing EHR platforms that fit within their particular organizational environments.

Developing a physician strategy to engage with employed and independent clinicians has paved the way for improving engagement and increasing performance accountability.

In the first year after the passage of MACRA, health systems were largely focused on how best to educate front-line clinicians and shaping their understanding and expectations for MACRA implementation. Many viewed broad educational campaigns and communication of the nuances and complexities of the QPP as a defensive strategy to guard against negative payment adjustments. However, systems have begun in 2017 to shift their thinking towards developing a more comprehensive clinician strategy in terms of recruitment, retainment, and compensation.

Given the QPP’s 2-year lag between reporting and payment, taking timely action to address low-quality or high-cost providers is challenging in advance of CMS notification. The reality remains that most physicians are unaware of their individual performance, previously reported by the Quality and Resource Use Reports (QRURs). As such, physicians are increasingly depending on their health systems to navigate the QPP. In a proactive approach, leading systems have recognized the need for real-time understanding of physician performance. Some are developing internal scorecards to measure performance on proxy measures similar to the QPP, while others have begun sharing quality dashboards containing comparative tracking metrics with clinicians. Engaging physicians through data tracking has helped them understand their performance and improve their confidence in relying on metric-based performance determinations. As independent practitioners develop closer relationships with their surrounding hospitals, health systems have found themselves increasingly liable for the performance of the otherwise unaffiliated physicians and physician groups. However, a gap between primary care and specialists was noted, with a fee-for-service orientation persisting in the latter. Developing a specialist strategy has become a necessity to increase collaboration with primary care practitioners to efficiently manage patient flow. Addressing this gap by targeting specialists early for education efforts and designing systems that incentivize value for all physicians were noted as important next steps for optimizing implementation of value-based payment models.

Empowering clinicians—not only to cooperate with MACRA implementation, but also to engage with data collection efforts and take ownership of their performance—remains a priority for 2018. Health systems continue to explore messaging strategies that would emphasize this sense of empowerment and prevent MACRA from being seen as an added administrative burden. In this vein, MACRA has stimulated a broader discussion about how to share (and what to share) with clinicians. Many systems are grappling with how to determine which measures would have the greatest influence on shaping clinical care delivery without inundating clinicians with data for measures that they cannot control or upon which improvement is challenging. Moreover, understanding the data around total cost of care and cost of services has become increasingly important with the inclusion of costs within MIPS. Leveraging cost data using Medicare Shared Savings Program (MSSP) claims and individual physician QRURs allows systems to estimate where individual clinicians fall on the cost curve and make them aware of their economic footprint. Notably, system leaders recognize that it is insufficient to simply provide clinicians with their scores and expect them to know how to change their workflows to achieve expected benchmarks. Rather, the intent is to communicate these data in an actionable way. For example, if data reflect consistent low scores for a certain patient group or condition, such as diabetes, then a health system could feasibly provide a set of recommended clinical actions and troubleshooting tips specific to managing patients with diabetes.

In this effort, physician engagement and leadership have become increasingly important for large health systems operating in complex payment environments. Many systems expressed the need for a physician champion in connecting with and engaging physicians around MACRA, and the need for clear communication about the requirements, bonuses, and penalties associated with the QPP. Handling the changing physician landscape—driven in part by MACRA—will continue to be an area of opportunity and exploration for many leading health systems as they recruit and retain physicians who are educated on and invested in value-based initiatives, such as the QPP. Adjusting compensation to reflect the priorities of value-based payment is critical to promoting clinician alignment and developing a unified approach to care delivery.

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