The Medicare Access and CHIP Reauthorization Act (MACRA) needs to be reimagined get back on track and to live up to its promise to incentivize value-based care.
The Medicare Access and CHIP Reauthorization Act (MACRA) has neither fueled growth in alternative payment models (APMs) nor has it imposed any significant payment differential based on value in the Merit-based Incentive Payment System (MIPS). Currently, the maximum increase MIPS offers is 1.86%, and in 2018, nearly all (98%) eligible clinicians had a positive MIPS adjustment, which shows there are no meaningful incentives for value in MIPS. In APM growth you would be hard-pressed to identify where MACRA kicked in if you were looking at Medicare Shared Savings Program (MSSP) growth.
In case you were wondering, MACRA was finalized in November 2016, so its incentives would have affected 2018 MSSP participation most directly. At the same time, we know from MSSP that physician groups can come together around value, maintain their independence, increase qualityo of care, and reduce health care costs.
By taking the lessons learned over the last 5 years, MACRA can be reimagined to live up to its promise.
Turning MIPS Into a Value Program
It wasn’t supposed to be this way. By 2020, MACRA contemplated up to a 5% increase in payments and a 5% decrease in payments. By 2022, it would have been 9%. We need to get back on that track.
One of the biggest barriers has been the difficulty of measuring value, particularly cost, for smaller practices. These measurement difficulties have created understandable hesitancy on the part of CMS to impose the levels of differential payments outlined in MACRA.
The key insight from the last 5 years is that small practices, particularly primary care practices, can come together in groups, be measured and rewarded as a group, and still maintain full independence in their practice ownership and operations. These have been the most successful accountable care organizations (ACOs) in MSSP.
MACRA already has a concept for this called a virtual group. As a voluntary mechanism, it has not worked; however, it should no longer be voluntary. CMS should assign any primary care practice not in an APM to a virtual group with at least 10,000 Medicare beneficiaries in the group. The virtual group would receive quarterly reporting on their progress from CMS (similar to what ACOs receive) and would be scored as a group on MIPS measures of quality and cost. Unlike joining an APM, the practices in the virtual group would not be required to have governance or collaborate although they are certainly incentivized to do so.
CMS would now be required to set scoring in such a way that the full range of the MACRA MIPS range of payment adjustment would apply. The lowest-performing virtual group would receive a 9% decrease and the highest performing virtual group would receive a 9% increase. The greater validity of scoring at the virtual group level creates the ability to differentiate between groups while incentivizing all Medicare-participating primary care clinicians to consider their options in value.
Beyond Primary Care
The entire health care industry has struggled with coming up with both quality and cost measurements for specialties other than primary care that are meaningful to patients, meaningful to doctors, and provide meaningful differences in performance. As currently written, MACRA lumps everyone in as an eligible clinician. In its, update MACRA should specifically allow CMS to create specialty-centered value arrangements. The previously outlined virtual groups combine total cost of care with quality measures that speak directly to primary care. The Comprehensive Joint Replacement (CJR) Model certainly speaks more directly to orthopedics than does total cost of care as a cost measure.
The vision here is not to mandate participation in APMs—MSSP, CJR, or otherwise. Rather, the updated MACRA would take the learning from APMs in cost and quality measurement and apply them to eligible clinicians to determine the adjustments to the fee schedule in valid ways that speak to the different specialties in health care.
Encouraging APM Participation
In addition to creating a far more obvious transition from the MIPS side of MACRA with the revisions we proposed, Congress should extend the direct incentive in MACRA for another 3 years. MACRA created a 5% bonus payment for advanced APM (AAPM) participation. Unfortunately, it does little to encourage the participation of smaller practices. This is not because 5% is not enough, it is because the timeline for receipt destroys the behavioral effects on the new entry.
A physician who joins an AAPM for 2022 will need to make that decision no later than July 2021. They will not receive their participation bonus until August of 2024, a full 3 years after they made the decision to participate. You do not need a complex understanding of behavioral economics to see the wind disappear from the sails of this incentive.
This timeline has created a negative effect on new entrants. If CMS can wait 2 years just to process a participation bonus, what is the urgency of joining an AAPM at all? CMS has maintained that the language of MACRA requires this timeline, but Congress should extend the AAPM bonus for another 3 years and require CMS to make the participation bonus payment to participants no later than 3 months after participation in an AAPM begins.
Congress can take the learning of MACRA and other value models to date to give millions more Medicare beneficiaries the benefit of these efforts.
In summary, Congress should update MACRA to:
Travis Broome is senior vice president of policy and economics at Aledade, which helps doctors stay independent and thrive in the transition to value-based care. Joining Aledade early on, Travis helped Aledade grow from 2 accountable care organizations (ACOs) to 20 ACOs. Today, he is a thought leader on accountable care and is responsible for strategy development, policy analysis, and economic modeling. Prior to Aledade, Travis was a regional director at CMS. He earned his MPH and MBA from the University of Alabama at Birmingham.