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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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sisgain1Lola Volkova (Koktysh)William Palmer MDAllanSteven Findlay Recent comment authors
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sisgain1
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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.
Telemedicine Software

Lola Volkova (Koktysh)
Member

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… Read more »

William Palmer MD
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William Palmer MD

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… Read more »

Steven Findlay
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Steven Findlay

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… Read more »

Allan
Member
Allan

” 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.

Niran Al-Agba
Member

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… Read more »

William Palmer MD
Member
William Palmer MD

If we group services, we take more risk. Why should we do this?

Robert Bowman
Member

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… Read more »

BobbyGvegas
Member

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

Niran Al-Agba
Member

Awesome! Wish there was a “like” button too!

Niran Al-Agba
Member

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… Read more »

pjnelson
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pjnelson

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.

meltoots
Member
meltoots

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,… Read more »