Given the flux in the healthcare industry and regulatory shifts from the Center for Medicare and Medicaid Services (CMS), it’s difficult to envision what the industry will look like in three to five years. Based on our visioning studies, however, we’re confident that value-based care will be the industry’s organizing principle. We’re also convinced that the Medicare Access and CHIP Reauthorization Act (MACRA) lays out a clear, well-designed path for different types of health providers to transition to value-based care.

In particular, the Quality Payment Program (QPP) introduced by MACRA provides frameworks for providers to shift their business and operations models toward value-based care.  The two QPP tracks, the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model(AAPM), are on a continuum. Many providers that initially comply with MIPS can build on that work to evolve toward participating in AAPM to deliver more value-based care, improve outcomes and achieve ongoing CMS bonus incentives.  

Healthcare providers need supporting business, process and IT systems to capture and report the metrics needed for AAPM, and this takes solid strategic planning. The decision to report on metrics like “use telehealth services that expand access to care” requires coordination of strategy, process and technology. CMS has set up MACRA’s QPP tracks to align with and encourage those phases – strategic planning, systems, reporting – so that providers at all levels of value-based maturity can participate. By following this progression, providers can begin the shift toward value-based care and the day when they’ll need to report this data to all payers for all patients, not just CMS.

Making QPP a Business Planning Tool

Providers fall into one of four categories in terms of how they are responding to MACRA:

  • Disruptors propose innovative payment models and work with CMS to shape AAPM qualifying criteria.
  • Early adopters choose to align their existing value-based and risk-sharing patient care models with current AAPMs.
  • Laggards struggle to satisfy minimum MIPS reporting demands. CMS lowers the bar here, satisfied by a few metrics that may be identical or similar to measures the providers may have collected under the pre-QPP Physician Quality Reporting System.
  • Majority adopters get on board with MIPS to be compliant and avoid penalties.

While the MIPS requirements are structured to help all providers move toward AAPM, majority adopters in particular can get more value from MIPS than penalty avoidance. These providers can and should leverage MIPS incentives to create long-term strategies and identify sustainable payment models for value-based care.

Consider that the CMS strategy includes three stages: metrics reporting, metrics evaluation and CMS feedback. This last step is key: Providers must act on the feedback from CMS to control their destinies. They must examine how they compare with a category’s benchmark and use the data to identify areas of improvement and adopt processes that help them move away from fee-for-service, volume-based models to value-based models.  Providers that don’t utilize the intelligence CMS provides will soon find themselves out of business, or acquired and employed by larger health systems.

Using MACRA benchmark data to improve performance can lead to real value creation. All AAPM participants automatically receive a 5% lump sum bonus payment starting in 2019 and continuing through 2024. By contrast, providers must achieve top-performer status to get a share of the annual $500 million MIPS bonus pool – not an easy accomplishment. The bonus pool payouts accommodate clinicians who earn qualifying scores and are first in line, so payments may be lower than forecast. 

For small providers or those with insufficient resources or budgets, complying with MIPS enables them to gain experience and data to help them participate in value-based contracts that employers and other payers increasingly require.

Moving Forward

So, how do you get from MIPS to an AAPM and other value-based care models? We recommend these three steps.

  1. Know which QPP track you qualify for based on the type of organization you are part of, and scope out your reporting alternatives (individual/group for MIPS, AAPM, etc.).
  2. Identify the stakeholders in your organization responsible for driving business and care transformation. Do you have a team, or will an individual lead? Someone in the organization needs to be willing to drive change and become the MACRA champion. Typical roles can be managers, directors or VPs of transformation.
  3. Develop a short- and long-term strategy to evolve toward a value-based care model. In the short term, you’ll focus on compliance; longer-term goals will be improving quality of outcomes, margins, patient and employee satisfaction.

You can start tomorrow by having a meeting with MACRA on the agenda. The outcomes of that meeting need to answer the following questions:

  • Where are we today in the context of MACRA? Do we currently collect metrics that map to MACRA requirements?
  • Where do we want to be as an organization in the next three to five years? Are we willing to increase short-term costs to deliver better outcomes in the long term?
  • Who is part of the MACRA team, and what are their roles and responsibilities? Needed participants include decision makers (and decision-making criteria), coordinator(s) in charge of follow-ups and the project plan owner.
  • Who could we affiliate with? CMS provides options for individual and smaller providers to ease MACRA compliance. An individual may partner with other entities for reporting purposes and leverage existing infrastructure. Affiliation is an effective way for providers to accelerate their evolution from MIPS to AAPM.

Clinicians know better than anyone else what is good for their patients, and MACRA is designed to directly reward them, not payers, for better outcomes and improved population health outcomes. QPP via MIPS and AAPM lays out a sensible path to build sound practices and capture important metrics that should help providers create sustainable value, while CMS achieves its goal of accelerating the industry’s shift to value-based care.

Vanessa Pawlak, Regulatory Compliance Practice Leader and AVP in Cognizant Consulting, co-authored this blog.

For more on this topic, see our Perspectives series MACRA: Marching Healthcare Toward Value-Based Care.”

Octavia Costea

Octavia Costea

Octavia Costea is a Senior Consultant at Cognizant. She has 15 years’ experience in the healthcare space in the provider, payer, regulatory... Read more