GAO Highlights Challenges for Small, Rural Practices in Shifting to Value-Based Care

The report confirms what CMS made clear in the final rule for the Medicare Access and CHIP Reauthorization Act: many small and rural providers were not ready for a shift away from fee-for-service.

A report from the Government Accountability Office (GAO) highlights what CMS has already acknowledged in its final rule for the Medicare Access and CHIP Reauthorization Act (MACRA): small and rural primary care practices will have a harder time making the leap to value-based care.

The report, released today, was commissioned when MACRA passed in 2015, and it’s clear upon reading that CMS was taking the feedback seriously as it put the final touches on the rule to implement the far-reaching law, the most sweeping overhaul of physician compensation in decades. As far back as July, Acting CMS Administrator Andy Slavitt was warning that MACRA might be delayed due to concerns that small and rural providers were not ready for the shift from fee-for-service to payments based on value.

Instead, the final rule for MACRA allows a process that lets smaller practices ease into MACRA and ramp up their implementation to avoid penalties. The GAO report released today spells out why: small and especially rural practices are simply not configured in ways that allow them to perform “population health” measures simply or cheaply, in part because the “population” may be spread over a wide area and not easily accessible.

CMS did not issue any objections to the report, which lists the following challenges for small and rural practices:

Financial resources and risk management. If practices lack the funds to invest in expensive items like electronic health records, much less making those systems interoperable, making a return on such an investment would take years.

Health information technology. Besides the cost, staff time and training is a hurdle. Practices may not even know what data they need to include.

Population health management. In rural areas, practices may not see patients for extended period because patients have to travel long distances.

Quality measurement. Small patient populations mean measures can be skewed by 1 or 2 bad outcomes, or by a single patient who needs expensive care.

Compliance requirements. Small staffs cannot find the time to deal with administrative tasks and simultaneously deal with direct patient care. Opportunities for mergers or accountable care organizations may not exist.

The report identifies groups that can ease the transition, which it calls “partner” or “non-partner” organizations. The key difference? Partner organizations would share in the financial risk, while non-partner organizations might provide services without sharing risk.

For more resources: See the MACRA compendium on The American Journal of Managed Care® website, http://www.ajmc.com/compendium/macra.