5 steps to get your hospital's MACRA strategy off and running

Anand Krishnaswamy, vice president of Kaufman Hall's strategic and financial planning practice, makes the case that MACRA readiness should be a priority not only for physicians, but also for hospital boards and executives.

The first performance year of the Medicare Access and CHIP Reauthorization Act is now underway, which will determine Medicare Part B payments in 2019. Although 2017 is designed to be a transition year, providers who dive in now have the opportunity to maximize financial rewards and set themselves up for success down the line.

"The biggest underlying issue is the lack of awareness and engagement by health systems and physician groups," Mr. Krishnaswamy tells Becker's. Though many providers are distracted by the uncertainty on Capitol Hill, MACRA and value-based care are likely here to stay — and it's time for hospitals to craft a strategy.

Mr. Krishnaswamy suggested providers take the following five steps to prepare for MACRA.

1. Understand the requirements. Perhaps the biggest road block to readiness Mr. Krishnaswamy has observed is a lack of understanding of even the general requirements of the two major tracks under MACRA's Quality Payment Program: the Merit-based Incentive Payment System and the advanced Alternative Payment Model.

Hospital boards, executives and clinicians should establish at least a basic level of understanding of these two tracks, he says. Beyond that, the depth and direction of understanding needed will vary. For example, executives will want to read up on MACRA strategy and the magnitude of potential financial impacts. Clinicians may want to focus on reporting requirements and quality benchmarks. At a minimum, Mr. Krishnaswamy advises all parties gain an understanding of how to avoid downside payment adjustments during the 2017 transition year and then focus on what will be necessary to protect their organization in 2018 and beyond.

To get started understanding the requirements, he suggests providers take advantage of the multitude of resources available online from trade publications, industry associations, consultant organizations and CMS itself.

2. Develop a strategic vision. The next step is to map out a strategy that fits into the hospital's current trajectory. "MACRA strategy for an organization isn't in isolation of its overall vision and mission of moving toward value-based care," Mr. Krishnaswamy says.

From a hospital and health system perspective, not only is it critical to think about how to prepare employed physicians for MACRA, but it is also important to determine what supports are in place for the organization's affiliated network and independent physicians in the community, according to Mr. Krishnaswamy. "Ultimately, some strategy for value-based care will really need to support those cohorts," he says.

3. Evaluate current readiness. After developing a vision, hospitals and health systems should evaluate readiness in two different ways, according to Mr. Krishnaswamy. First, he advises hospitals to look at progress in value-based care and how familiar providers are with these types of models. Second, he advises hospitals to evaluate the fragmentation and alignment of physicians within their market. This will help hospitals gain an understanding of how vulnerable their physician network is — something Mr. Krishnaswamy believes is critical to evaluating readiness.

He also says hospitals should not overlook the unemployed, unaffiliated physicians in their market. Although these physicians may not have direct financial ties to the hospital, leaders need to think competitively because those physicians may start looking for alignment structures like ACOs. "If you are not doing it today, someone else might be doing it," Mr. Krishnaswamy says. The opportunity for hospitals in MACRA lies in how ready they are to support physicians looking for outside solutions or vehicles to grow their patient population.

4. Assess options. This may seem simple at first — providers have two main options in the QPP, the MIPS and advanced APM tracks — so they just need to pick one.

Not so, says Mr. Krishnaswamy. This decision should be made with an eye on how quickly a hospital's market is moving. For example, if competitors in the market already have Pioneer ACOs or other established advanced APMs, hospitals will want to move quickly to get into that track or potentially lose out on physicians. However, if hospitals are in a slower market but feel prepared for the MIPS track, they should take advantage of the opportunity to earn potential upside payment adjustments for 2019. Providers confident in their MIPS strategy could earn a 4 percent positive adjustment in 2019 Medicare Part B payments. Because the program is budget-neutral and MIPS is scored relative to national performance, if a significant portion of providers are penalized or don't do well, those who earned positive adjustments could theoretically earn even more than a 4 percent positive adjustment in 2019.

"The only caution I would say as you think about a MIPS maximization strategy is you can't think of it in isolation of advanced APM opportunities," Mr. Krishnaswamy says. "The reality is if your organization is already prepared to maximize under MIPS and prepared to take on downside risk, there are real dollars in the advanced APM track."

5. Implement a MACRA strategy. The last step is to simply get started. This year is a transition year and therefore offers providers the best opportunity to practice. While past performance in CMS legacy programs such as the Physician Quality Reporting System or Meaningful Use program can be good indicators of performance under MACRA, the program truly is a whole new animal. It contains new requirements and new levels of flexibility and opportunity for providers, so they may want to test a few different measures and only submit their best few to start. At the bare minimum, providers need to submit at least one quality measure or one improvement activity under the MIPS "test pace" to avoid the 4 percent negative payment adjustment in 2019.


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