MACRA and the referral management imperative

Referral management and network leakage reduction were already top-of-mind issues for providers, and thanks to the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), they will now be even more critical.

MACRA introduces new formulas to determine physicians' Medicare Part B payments based on how they perform relative to other providers. Implementation of these performance-based payments will be phased in over the next few years, beginning with data collection in 2017 and at-risk payments in 2019. Referral management will play a key role in determining providers' success under MACRA, influencing their performance on numerous measures. In addition, several of the new measures for determining physician payments will specifically track how providers manage referrals.

Under MACRA, physicians will be paid under two different payment models. Providers operating under traditional fee-for-service payment will be subject to the Merit-Based Incentive Payment System (MIPS), which ties a portion of payment to performance measures. On the other hand, providers with newer value-based care models (e.g., ACOs and Medical Homes) will be paid under the Alternative Payment Model (APM). For providers practicing under qualifying value-based care models (e.g., ACOs and Medical Homes), the Alternative Payment Model (APM) will determine payments under MACRA. Many providers are eager to qualify for APM payments quickly, since they anticipate future pressures to move to accountable care models. CMS will also provide a 5% annual bonus to physicians who opt for inclusion in the APM through 2024, as an extra incentive to nudge providers toward accountable care.1

The importance of referral management in ACOs and Medical Homes is already well documented. Providers operating in these models are already moving quickly to improve referral management, and this effort will accelerate as MACRA introduces APM payments. Providers currently implementing such measures will have an edge under MACRA, and those looking to rapidly catch up will need to carefully examine referral management practices.

MACRA will present a more radical change for physicians retaining a fee-for-service model, as they will now see a significant portion of their payments tied to performance under MIPS. Physicians will receive MIPS payments that include bonuses or penalties, depending on how they perform across numerous measures of quality and value performance. Starting in 2019, up to 4% of a physician's revenue from Medicare fee-for-service reimbursements will be variable based on MIPS measures, rising to a maximum of 9% by 2022.2

Physicians' MIPS bonus or penalty will be based upon a Composite Performance Score (CPS), a weighted average of performance measures in four categories3:
Quality (60% of total score in 2017, declining to 30% thereafter): providers will choose up to 6 measures of clinical care quality from a list of 300+. One or more must be an outcome measure.
Advancing Care Information (25% of total score): providers must choose up to 9 measures of IT use from a possible list of 15.
Improvement Activities (15% of total score): most providers must complete up to 4 improvement activities from a possible list of 90+ activities
Cost (0% of total score in 2017, rising to 30% thereafter): No data submission is required, since CMS will calculate cost measures from claims

Providers can selectively choose which measures to factor into their MIPS Composite Performance Score, so long as they have the overall number of measures required in each category. That means providers can select measures that play to their immediate strengths, while addressing weaknesses over time.

For providers who excel at managing referrals, MIPS provides several immediate opportunities to earn bonuses. Several MIPS performance measures are specifically about referral management, and providers using software to track referrals and follow up on cases are likely to earn an immediate boost in their MIPS Composite Performance Score across several of the categories:
Quality: Measure #374 concerns referral loops, tracking the percentage of referred patients for which the referring provider receives a report from the specialist to whom the patient was referred.
Advancing Care Information: Two measures (ACI_HIE_1 & ACI_HIE_2) track whether providers sent or received electronic summary of care documents on every referral. Another measure (ACI_HIE_3) tracks whether providers reconciled past records of patients' clinical history when seeing them for the first time.
Improvement Activities: a measure on closing referral loops (IA_CC_1) tracks whether specialists who receive referrals send reports back to the referring physician, or vice versa whether the original referring physician follows up with the specialist to request reports. Another Improvement Activity measure (IA_CC_12) is more flexible, requiring "active referral management" that could take multiple forms, including tracking patients referred to specialists throughout the entire process.

Providers can satisfy many of these measures by adopting a referral management software platform like Fibroblast. Fibroblast automates referral management processes, ensuring immediate compliance with many MIPS measures. Adopting referral management software requires minimal upfront investment and will help to earn MIPS bonuses for years to come. Aside from boosting MIPS bonuses, Fibroblast can also help providers increase their revenues by reducing leakage (referrals to out-of-network providers). In the longer-term, strong referral management will also help fee-for-service providers prepare to shift toward an accountable care model that is paid under the Alternative Payment Model (APM).

About The Author

Scott Vold is the CEO and Cofounder of Fibroblast, a referral management platform for providers. The first step to managing referral patterns is understanding them, and Fibroblast maps referrals in real-time. Fibroblast also eliminates network leakage by automating the referral process with a secure, HIPAA-compliant platform that enables staff to quickly send referrals and receive patient status notifications as appointments are scheduled and patients are seen. This drives patient referrals in-network and keeps them there. For population health management, Fibroblast's closed loop referral platform also empowers care coordinators and case managers with the tools they need to more effectively manage high risk patient populations and drive preventative screening campaigns. Fibroblast is EMR-agnostic; it can integrate with all major EMR systems or operate equally well as a standalone application. For more information, contact


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