Improving MACRA’s Chances of Success

Many providers view the Medicare Access and CHIP Reauthorization Act of 2016 (MACRA) with skepticism. MACRA represents the largest implementation of physician pay-for-performance ever attempted in the United States. Starting in 2019, MACRA will integrate and potentially simplify performance measurement by combining a number of measures and programs. It will also increase the magnitude of financial rewards and penalties, which could help motivate practice change for the better.

One of the more controversial aspects of MACRA is its Merit-Based Incentive Payment System (MIPS) for physicians and practices not participating in alternative payment models. One physician captured the prevalent skepticism when he wrote in the public comments on MACRA: “This rule will wreak havoc with my practice while offering absolutely no evidence that it will do anything to improve patient care.” Partly due to the many public comments, the Center for Medicare and Medicaid Services (CMS) has made substantial changes to the final rule. However, there is room for further changes during the rollout – and potentially strong interest in doing so from Tom Price, the physician nominated to lead the Department of Health and Human Services.

With the discontent voiced to date about MACRA and MIPS, it will be important to avoid any “unforced errors” in MACRA’s rollout, which could needlessly add to the displeasure. Other rollouts of performance payment systems have accrued lessons the hard way, but published research on performance measurement provides a good deal of insight on how to avoid several pitfalls:

Ensure that payment mechanisms have a clear clinical rationale. Each performance payment under MIPS is linked to an underlying performance measure. If practicing clinicians do not understand why these performance measures were created or how they are likely to benefit patients, clinicians will resist the measure, and practice will not improve. Nobody likes being penalized for something they do not understand, do not agree reflects good patient care, or perceive as being completely beyond their control. Even being rewarded with a performance payment can be unnerving, without knowing why the reward was given and what can be done to earn it again. When RAND researchers asked physicians about how payment models affect their practices, one said, “I got a bonus check. And the other specialists didn’t…. It was like the tooth fairy. I woke up and a check was under my pillow.” 

Anticipate operational errors. The MACRA rollout will invariably encounter problems. We just don’t know which issues will surface, or how severe they will be. Even an impeccably designed program, with just the right combination of measures and incentives, can fall prey to programming errors that result in the misallocation of millions of dollars. For example, computer code that animates a payment mechanism could misplace a decimal point, potentially causing clinicians to be vastly underpaid or overpaid for a particular measure. Such glitches have been seen before in state-based payment programs and, famously, in the rollout of the Affordable Care Act’s healthcare.gov website in 2013. Proactive steps could include:

— Setting up a system to audit a subset of cases to ensure that the correct payment was made

— Establishing a system for real-time feedback and prompt adjudication of errors. Corrected errors could help establish trust, particularly among smaller practices that might otherwise feel swept up by the system.

— Running the payment system in test mode for a year before any payments or penalties begin. This would allow errors to surface (and be fixed) before payments or penalties are actually made. The Centers for Medicare and Medicaid Services (CMS) has already done something similar in its recently announced the “Pick Your Pace” option, which allows providers to choose to submit data during 2017 without a payment adjustment in the first year. The intent is to allow the provider to ensure that the system is working before performance payments begin.

Find a “third way” for risk adjustment. It is time to retire the longstanding controversy about whether to risk adjust at all by finding creative solutions to the problem. This controversy is animated by two opposing truths: 1) Without risk adjustment, we risk penalizing providers for taking care of the most challenging patients, including those who are poorest and sickest; 2) With risk adjustment, we risk excusing some providers for delivering poor care, when they may be able to do better. There are ways around this impasse, however. For example, RAND studies have shown that an approach based on stratification by key parameters (such as race, or area-level poverty) can help avoid unintended consequences while preserving accountability. 

Reduce the burden of performance measures. Providers and health systems are burdened by a need to report hundreds of quality measures to dozens of different entities, sometimes in slightly different formats. The need to report so many measures, often in slightly different formats to different entities, may actually distract clinicians from quality improvements. As a result, many providers feel that performance measurement is a burdensome and low-value exercise. Because MACRA will consolidate measures over time and reduce the reporting requirement, this could help address the sense of overly burdensome reporting. Old measures should be considered for retirement at least as often as new ones are added, or performance measures could be rotated each year, to keep providers and health systems from focusing on aspects of quality that are measured, to the exclusion of those that are not. Setting up an advisory panel of practicing clinicians could also help keep MACRA administrators in touch with the opinions of end users.

It may take some time to know how well MACRA’s initiatives are leveraging performance measurement to improve outcomes and control costs. Given another five years to perfect the measures, a still better approach could be fielded—but awaiting perfection is not a viable option. The U.S. health system urgently needs to improve outcomes and control short- and long-term costs. The key to success for MACRA may be in the details.

Adam J. Rose is a natural scientist, Peter S. Hussey is a senior policy researcher, Monique A. Martineau is a communications analyst and Mark W. Friedberg is a senior natural scientist at the nonprofit, nonpartisan RAND Corporation.


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13 replies »

  1. Thanks for one marvelous posting! I enjoyed reading it; you are a great author, and for the readers I suggest them to go with SISGAIN, they do the medical software development, healthcare software and medical reports.
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  2. Technology-wise, MACRA allows introducing multiple innovations to control costs and performance. As author mentioned, the Act can be improved by reducing the burden of performance measures. And one of the measures that is still not yet defined, but should be is patient engagement, because by shifting to the value-based care, providers have to ensure high health outcomes.

    Without patients being on caregivers’ side it is simply impossible. However, patient engagement still stays the abstract term, producing hype and buzz without practical value. At ScienceSoft, we’ve addressed this problem and created a system to transform patient engagement into a set of measurable criteria: https://www.scnsoft.com/blog/patient-engagement-analytics-its-measurable

  3. I wish we could focus. Pick a big problem and go into it deeply. There are a bunch: The EMR is driving everyone crazy. Pharma costs are going wild. What is the best way to deal with new technology? How do we subsidize the poor and yet cause providers to feel the money came from the patient? [third party payer problem] Too many administrators. Provider-induced demand?…how much?..how to manage? Moral hazard and mental health? Is there any way to be sure the services for mental health and rehab are not wasted? What are we ever going to do about long term care?

    We can’t be floating vague general feelings about health care forever. We need to do the best thinking we can on some of these very difficult problems. They actually are interesting problems too. And they are all over the world. If we could improve some of these we could lead in a world class health reform movement.

  4. Mr. Findlay – We definitely do not need a reminder MACRA was a bipartisan piece of legislation. You may believe us to be irrational, but most physicians believe health policy experts are a few fries short of a happy meal. That does nothing to forward meaningful conversation.

    In your mind, (not being a physician after all) “the need to push value-based purchasing in medicine is unassailable.” I see the world differently. Since it is a physicians’ world to which you are referring, do not count us out yet on affecting change one way or the other.

    Your assertion those of us opposing MACRA implementation are irrational is offensive. Physicians who do not grasp “value-based importance” are no more in the minority than the “hidden” Trump voters. As to your notion that payment will never return to way it was in the 1960’s and 70’s, you are ill-informed. In my 16 years of practice, I have never seen so many patients paying cash out of pocket for visits. Its quite shocking actually. I suspect in 2017, we will see many more paying cash to see an MD.

    For those of us who decide to opt-out by 2019, MACRA will not actually end up applying to us. However, imo it is a shame to lose so many good physicians (such as Dr. Nelson who commented below) who have been in practice for more than 40 years. That kind of experience should not be cast aside lightly. A nation of only young, newly practicing and burned out physicians will be ripe for continuing decreases in life expectancy.

  5. ” It is supported by organized medicine–your lobbyists.”

    It might be convenient for your arguments to think and say “your lobbyists”, but that isn’t true. The AMA represents only a small portion of practicing doctors and many of the members are academics or political aspirants. The last membership number I recall was that the AMA represented 17% of physicians and the number was falling. The AMA’s own membership had to sue the AMA to get the details of how the AMA colluded with government.

  6. RAND folks – Thanks for this post. Good points. There’s little doubt that MACRA’s implementation will be iterative….and that Price et al will do some tweaking, possibly even this year. But a reminder is needed for the docs (below) who frequently comment on THCB an have an irrational hate of MACRA (and apparent distrust of government): this was a strongly bipartisan piece of legislation. It is supported by organized medicine–your lobbyists. It will almost certainly not be repealed anytime soon. Some parts of it will probably fail or need changing in the future. It is an experiment, as recognized by current CMS leadership. The need to push value-based purchasing in medicine is unassailable. Physicians and others who do not yet grasp that are increasingly in the minority. Payment systems for care will not ever go back to the 1960s and 70s.

  7. Awesome. Again, where’s the dad-gumbed “like” icon when you need it?

  8. THCB has earned credibility at a time when this is difficult given what is being published and promoted. Recent posts have lagged regarding MACRA and Male vs Female Internists. Interestingly the election post shows the way.

    This MACRA piece is of little value compared to the previous work by Kip Sullivan regarding MACRA and also his Open letter series which demonstrates how assumptions lacking evidence basis can become law. The result has been incredibly costly regulation moving the nation in the opposite direction compared to value. It should be hard to ignore 12 articles that demonstrate the discrimination inherent in pay for performance schemes, but apparently it is not.

    Research academics believe that people can be converted to variables. Those most familiar with health care delivery understand the difficulty of capturing one person much less the numerous interaction of that person with all of the factors that shape outcomes – and then exponential difficulty with more people and interactions.

    There are two areas would move this blog to the next level. One is to have some independent review of the works by those who provide care as has been noted. The second is to critically review the area of health care outcomes as shaped by clinical or clinical digital interventions. There is a great opportunity to move health care forward rather than backward as seen for decades – when studies do a much better job of considering the major contributions of behaviors, situations, environments, social determinants, and community resources – or lack thereof.

    THCB could play a most important role to wake up the academic/foundation/government/corporation designers and the nation to the real determinants of health rather than spending more billions or tens of billions a year in clinical or digital clinical intervention areas that have little hope of changing outcomes while adding tens to hundreds of billions each year to the cost – the opposite of value.

    The election results studies stand testament to the numerous correlations between health outcomes, social determinants, behaviors, situations, environments, community resource, and other factors that shape outcomes. These outcomes include the past election, health outcomes, education outcomes, and economic outcomes.

    It would appear hard to ignore the fact that the nation really divides into lowest concentration counties and higher concentration counties. Based on physician distributions and specialties, in health care spending alone about $29,000 per person per year in health spending goes to the top physician concentration counties with 10% of the population with only $3500 per person to 2621 lowest concentration counties with 40% of the population. A slightly higher figure could be used for places with 50% of the population. Recent years have not resulted in much change even with insurance expansions as the workforce deficits remain primarily because Medicaid, high deductible, Veteran, and Medicare plans are more concentrated in these areas and payments too low help shape deficits of workforce.

    Even worse, billions more have been extracted from these counties to pay for various costs of regulation and measurement – dollars that no longer can go for team members, services, local jobs, and local economics. Burnout and lower productivity as well as higher costs of recruitment, retention, and turnover add to the problems.

    Outsider reviews including those representing health access or care in lowest concentration counties might prevent the numerous alternative treatments that only delay real solutions in areas such as primary care, basic services, mental health, health access, and care where needed.

    The following studies are all candidates for critical review including male to female internists and urban to rural hospital comparisons (apples to oranges flaws because of different distributions, populations served, other differences), resident work hours limitations (little impact in studies of the same populations served, NP vs MD studies (same or similar populations = same outcomes), Primary Care Medical Home (differences in providers, distributions, major cost differences), and numerous studies of high vs low volume. Also not considered was the impact of DRGs to worsen readmissions, making it possible to improve readmissions and in a relatively short period of time.

    The micro focus is a huge problem in such research and the macro or long term consideration is minimized. How can you ship dollars, jobs, services, and team members out of areas of need and not impact care and health outcomes?

    The 20 year path that led to MACRA has been a great distorting influence. Progress begins with critical review and integration of the real determinants of health outcomes.

  9. Agree with Dr. Nelson. None of these individuals are physicians. Their suggestions are absolutely lacking any clinical experience and are almost offensive. MACRA might be an existential thing to these individuals who will never have to deal with it; but for physicians they are chains binding us in the future.

    We are not horses to be broken, bought, and sold. We are physicians who spent years studying, training, and sacrificing. I disagree with the opinions of these policy gurus, physicians do not need more systems and more programs with more administrators to answer to, we need more time to sit and talk with our patients, and more freedom to practice medicine and save lives.

  10. I would hope that the leadership of THCB would require a group of practicing physicians to recommend editing of these types of commentaries. All they accomplish is foster a greater level of angst. There is certainly a bit of cognitive dissonance occurring amidst this MACRA contribution since the syntax indicates the lack of clinical context. Even with its charitable attributions, its definitely not comforting. Next time, may be consider something like the deficits in the level of social capital in every community that diminishes the commitment of so many people to maintain a good Personal Hygiene Plan.

  11. Only way to improve MACRA…kill it now.

    Yet another post by non-front line MDs that have NEVER participated in MU PQRS or quality reporting program, all the while trying to care for patients, and “kinda” hear these programs are terrible.

    Hate to break it to all the “policy” wonks, but you have lost the physicians in your games. When you lose us, that is a HUGE problem and will be VERY difficult to remedy.

    If PQRS or MU was such a success, tell me ONE study that shows that self reporting quality measures, like those programs, improved outcomes/care, reduced costs, or reduced burden on MDs. ::crickets:: Not one. Tell me one study that cert EHR MU PQRS has improved efficiency, security, interop, usability…none. You break us, its over for YOU too. And we are broken. Cert EHR has made a policy market that ignores the clinician and focuses totally on the cert requirements, not the customer. We need CMS ONC out of the EHR. We need innovation, and the policy market of EHR/MACRA killed it.

    Front line MDs are SCREAMING to stop the data entry, self reporting of so called quality measures, and all the other nonsense that is directly interfering with our ability to care for patients…

    MACRA is just more of the same BS of MU PQRS with new names and adding a 4th thorn of CPIA (totally unproven to improve ANYTHING!). I want all these authors to report quality measures of our choosing,for every 15 min of their work and tell me what CPIA they are doing and then report it and then get no feedback for 2 years and then hope not to get penalized 2 years from now.

    All these programs should be shuttered. If CMS wants to test new models, fine, but NOT by punishing MDs with penalties on non-tested,unproven regs and continually failing programs.

    This faux “we are listening” with the Twitterrific CMS of late is WORSE than just ignoring us. telling MDs you are listening and then doing the opposite is a slap in the face. A single 1 year pick your poison, is a joke. We want real relief from the hyper-regulation that the last 7 years of DC has laid on our backs.

    Driving great MDs out of practice has severe consequences. Burdening the rest will damage the profession for a generation. The policies since 2009 have set back REAL progress in EHR and interop at LEAST a decade. And to do it for 5 more years will set it back 20. Listen up folks. We are angry. Those of us left that haven’t quit or killed ourselves are fighters…we will not go gently.

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