MACRA Continues to Catalyze Movement Towards Value

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Given that 2018 marks the last year of the transition-year policies, implementation challenges identified during the first 2 years of Medicare Access and CHIP Reauthorization Act (MACRA) preparation and execution must be addressed to ensure effective delivery of high-value care as intended.

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.

The multiplicity and overlap of programs under the QPP demand changes to internal governance and leadership.

As the QPP is structured, large health systems often participate in multiple APMs and other value-based programs simultaneously. Many systems have some groups of clinicians reporting under MIPS and others as Advanced APMs. Even amongst those reporting as APMs, systems are often managing multiple risk contracts, such as Medicare and commercial accountable care organizations (ACOs). As systems increasingly realize the overlap and redundancies in reporting requirements, they have been forced to develop more robust governance structures to manage and cohere their approach to these programs. Many systems continue to question how the scope of their markets—spanning many Taxpayer Identification Numbers (TINs)—will impact their ability to implement and strategize for MIPS and APM participation. Finding ways to manage TINs, clinically integrated networks, and other referral networks under the QPP framework remains an area of priority.

The reconciliation of these separate entities has motivated broader engagement in payment reform in which QPP implementation has taken a back seat to the larger transformation of the system’s governance structure. The result can be characterized as the establishment of a “Value-Based Care Enterprise Governance Model.” In this model, health systems are streamlining individual program committees to establish joint multidisciplinary teams responsible for coordinating all of the enterprise’s value programs (eg, ACOs, medical homes). This systematic approach allows the system to coordinate assets and extend the capacity and capability of its clinicians to use resources in ways congruent with the overarching goals of value incentives. The question then becomes, who within the health system owns MACRA, or broader value-based payment, implementation? According to the handful of systems with a reoriented governance model, the head of finance is instrumental in leading the entity’s value-based care teams. While the broadening of Finance’s responsibilities to encompass clinical care delivery and information technology is a cultural shift, a coordinated enterprise makes health systems more effective in their ability to strategize across payment models and streamline data reporting to maximize revenue potential and care quality.


By and large, health systems see a compelling business case for acting now, rather than later, when the market has more discernably shifted towards value-based care. Systems see programs such as the QPP as an opportunity to build alignment with physicians around the goals of value-based care. Many health system leaders see the QPP as an opportunity to facilitate “value processes” and handle the technical pieces like reporting for clinicians, limiting burnout and improving alignment. Health system leaders recognize that merely participating in a risk contract does not ensure improved care delivery. It is their responsibility as the organizing system to implement the necessary innovations and care practices to achieve the value demanded by the contract.

While the internal impetus on the part of the health system may exist, providers are still seeking external support from payers, both public and private. Despite such a strong ideological commitment to value-based care, health systems are still limited in their capacity to achieve its goals. As long as fee-for-service constitutes the majority of healthcare payments, health system progress in reducing costs and improving quality will continue to be hindered. Health systems need CMS to continue putting forth a variety of contracts and payment models, ranging from nominal risk to full capitation, to provide them with the incentive to make investments in care delivery innovation. Offering a range of options will give providers the flexibility to start small and gain experience with managing risk. In this regard, Comprehensive Primary Care Plus, bundled payments, and the MSSP Track 1 option are good starter programs to set health systems up for success in increased risk-bearing models. Thus, the health systems should continue building up their risk appetite via participation in starter APMs. The more health systems can demonstrate proof of concept in the delivery efficient care, the more continued and expanded support providers are likely to receive from CMS for value-based initiatives.

MACRA is a forceful catalyst pushing providers to transition from volume to value. While many large health systems have begun transitioning internally, they still depend on external support from value-based incentives and programs facilitated by payers such as Medicare and Medicaid. Payment transformation will only be successful if CMS can set the pace by creating broad, directional fiscal and quality targets that allow providers the flexibility to innovate. Ongoing APM development is instrumental to this approach, as providers need a range of options to build up their experience with managing risk. To garner such support, health systems must continue to signal commitment to moving forward with implementing value-based care.