How much of a game-changer is MACRA and the MIPS and APM paths?

By Clive Riddle, July 8, 2016

That is the question asked of panelists in the current edition of MCOL’s ThoughtLeaders. Here, in its entirety, is a response from one of the panel: Mark E. Lutes, Chair, Board of Directors / Member of the Firm, at Epstein Becker Green.  Actually, here’s the question posed in its entirety: “How much of a game-changer is MACRA and the MIPS and APM paths going to be for Medicare, and will Medicaid or Commercial programs adopt similar approaches for applicable segments?”

So here’s what Mark had to say in response:

MACRA represents a laudable attempt to replace the truly failed SGR with an approach that seeks to do the right thing, which is to reward quality and efficiency at the individual practice level. Though it has some challenges and, like most major policy changes, will require plenty of tweaking once implemented in real world situations. MACRA is likely to be a game changer but, as per usual, not in the direct ways that Congress/CMS may have anticipated or hoped.  Thus, MACRA, like HiTech and dozens of other pieces of legislation before it, is most likely to illustrate that the "law of unintended consequences" is the most predictable result of Washington DC legislative and regulatory action.

A few illustrations-the availability of the APM v the MIPS pathway was hoped to induce more rapid adoption of risk assuming payments.  If CMS had seen fit to provide more of a glide path toward APM qualification, the "brass ring" of Medicare payment increases via APM qualification might well have "lit a fire" under segments of the provider community seeking to avoid the uncertainties of MIPS based fee schedule increases.  However, the draft rule puts that brass ring out of reach for most medical groups, ACOs, IPAs, and PHOs.  Thus, one of the key "game changing" opportunities of MACRA is likely to be missed.  As it did with ACOs, where it demanded provider investment to produce savings that benefited the Medicare program and then put limits on the providers' opportunity to garner the reward for their efforts, CMS is in danger of missing the golden opportunity to incent a stampede toward APMs by making the "perfection" in risk assumption the enemy of the "good" in the way of progress towards that end.

In fact, in the proposed rule, CMS averts its eyes from the efforts of many physicians to achieve value through managed care programs. The rule only gives credit for activities physicians are conducting in the fee-for-service realm. One thing to watch is a report CMS is due to issue by July 1 as required by Section 101(e)(6) of MACRA on the feasibility of integrating the APM concept in the Medicare Advantage payment system. And, unfortunately, there's no credit given for non-Medicare APM activity until 2021.   

Likewise, because MIPS allows providers a great deal of choice in metrics upon which to be measured, it will not drive change across other payor streams.  There are too many choices for other payors to expect that their provider networks will be geared up to report any particular subset around which financial incentives might be built.  It may be more realistic to hope that consensus, adoptable in a range of payment programs will come instead out of the joint payor/CMS work in the Health Care Payment Learning & Action Network (LAN).

In several years, looking back on the run-up to the payment impacts, MACRA is likely to be seen to have been a game changer-in two ways that are not within the story line.  First, MACRA is likely to be regarded as an instigating event in physician practice consolidation, through the expansion of hospital employment, insurer physician practice transactions, specialty group growth and physician practice Management Company ventures 2.0.  Even if the individual MIPS measures are viewed by individual and small groups of physicians as doable in the near term, there will be mental energy burned to comprehend them, software upgrades to support their reporting, and there will be a growing fear of the unknown as the resource use measures evolve.  Therefore, probably the most predictable and predominate result of MACRA will not be the instigation of quality improvement and enhanced attention to resource use which the federal government intends, but another "nail in the coffin" of small scale medical practice.

Second, MACRA is likely to be regarded as a watershed moment wherein the fee-for-service Medicare program took on (or even exceeded in granularity) the incentives present in managed care.  Previously, a physician practice opted in to payment for performance.  PQRS and meaningful use had been, to date, largely reporting incentives and ACO downside risk was both voluntary and relatively rarely attempted.  The dawn of MACRA might be seen as CMS crossing the line from being a passive payor to being a demanding customer that changes the specifications of its order and settles it bill according to data it controls well after the date of service.

Note: Mark will be participating in the faculty in a webinar on this topic, along with EBG's Lesley Yeung and EBG Advisors' Bob Atlas in the HealthcareWebSummit event on Thursday August 4th, 2016 at 1 PM Eastern : Preparing for MACRA - The Next Steps: Composite Scoring, Performance Considerations, Implications and More.