The following is a guest blog post by Karen Way, Health Plan Analytics and Consulting Practice Lead at NTT DATA Services. This post is part of the MACRA Monday series of blog posts where we dive into the details of the MACRA Quality Payment Program.
When the Medicare Access and CHIP Reauthorization Act (MACRA) became an official federal ruling for the healthcare industry in 2015, the act replaced the previous Medicare reimbursement schedule with a new pay-for-performance program focused on quality, value and accountability. In short, the legislation rewards healthcare providers for quality of care, not quantity.
While many discuss the impact on providers, what is the health plans’ role in aiding health systems and physicians to meet MACRA requirements?
MACRA provides multiple opportunities for health plans to increase and improve collaboration with provider networks. Recommendations on how health plans can accomplish this include sharing information and services, creating new partnerships and bringing about financial awareness as the legislation continues to take effect.
One of the requirements under MACRA is for providers to enhance clinical measures and data analytics to strengthen members’ experiences. Health plans can assist by recognizing where providers lack expertise in data-related facts to offer input and support where it’s most beneficial.
For example, a provider may not have as much knowledge on advanced data science, but health plans can share their predictive models and tools to strengthen analytics. Sharing advanced technical infrastructure to facilitate data exchange will enable providers to access a more complete picture of members’ profiles. In return, the picture will provide a higher quality service to individual members, as well as opportunities for health plans to continue offering tailored consulting and data support.
At its best, sharing data to improve clinical measures is a win-win scenario. The Healthcare Effectiveness Data and Information Set (HEDIS) is a tool used by more than 90 percent of America’s health plans to measure performance on important dimensions of care and service. Just as HEDIS calls for measurement, MACRA also encourages health plans to aid providers with reporting standards. Under these rules, health plans are required to record a wealth of information on members, and when shared with providers, the tide lifts all boats.
Partnering to Manage Risk
Some of the changes under MACRA are reminders for providers to be highly aware of risk management. Providers will seek strong partners with the necessary skills, experience and knowledge to ensure they do not take on risk greater than they can support. To assist, health plans should enter into risk-sharing relationships, such as value-based contracts, with high-performing providers.
Health plans should actively strive to be strong partners by enabling robust data analytics that support quantitative action plans in the areas of quality and clinical care gaps, medical cost and trend analysis, population health, as well as member-risk management. As health plans partner with providers, they should also stay flexible on potential changes to provider payments as the pay-for-performance model(s) mature over time.
Health plans also need to be aware of the financial considerations that result from increased value-based contracting for small and large providers.
Under MACRA, smaller providers and individual physicians are more likely to be exposed to potential increase in costs, which may result in additional provider considerations. As Medicare payments shrink, these providers will look to shift costs to other payers, making contract negotiations more difficult and potentially increasing unit costs for some services. Large physician groups, or those located in markets with progressive healthcare systems, will look to negotiate even higher reimbursement rates due to the potential for increased competition.
Health plans should also be aware of potential impacts beyond Medicare fee-for-service (FFS), which is the initial focus of the MACRA legislation. Pay-for-performance is likely to extend beyond Medicare FFS into other health plan lines of business, such as Medicaid or commercial plans. For example, under MACRA, Centers for Medicare and Medicaid Services stated it would consider permitting Medicaid Medical Homes to count as an alternative payment model if participating practices would risk at least four percent of their revenue in 2019 and five percent in 2020.
Why This Matters
Overall, MACRA creates a tall order as it aims to increase pay-for-performance and decrease care based on quantity. This notion is an altruistic adjustment for the health system and each party has a specific role to play to achieve the dream. But the backbone of this goal is collaboration between health plans and providers. Collaboration will result in shared clinical measures, awareness and management of risk, lower healthcare costs and, most importantly, improved patient outcomes.