The transition to MACRA and its affect on the revenue cycle

With the October release of the final rule for the Medicare Access and CHIP Reauthorization Act of 2015, physician practices across the country are bracing for dramatic change.

MACRA, a landmark payment system for Medicare physician fees, was enacted in 2015 to replace the flawed sustainable growth rate. Under MACRA, performance measurements for new payment models began in 2017, which makes it vital that physicians learn about the implications of MACRA for their practices.

"The shift from volume to value is moving quick and if you don't have a grip [on this shift], you can get caught in the crossroads," says Justin Barnes, partner and chief growth officer at iHealth Innovations, which offers revenue cycle performance, quality reporting and best practice optimization services.

Impact on RCM

Part of navigating this shift is ensuring a smooth revenue cycle management transition. There are essentially two large categories in which MACRA impacts RCM, the first of which is related to pay-for-performance.

The final rule for MACRA includes two pathways for provider participation: the Merit-Based Incentive Payment System, or MIPS, and the Advanced Alternative Payment Model. MIPS is designed for providers in traditional, fee-for-service Medicare. Advanced APM is designed for providers who are participating in specific value-based care models.

MIPS rolls together and sunsets three legacy CMS programs: Medicare Meaningful Use, the Physician Quality Reporting System and the Value-Based Payment Modifier. In 2017, clinicians will earn payment adjustments based on performance in three categories linked to quality and value that will be similar to the previous programs. A fourth performance category is expected to be added in 2018. Payment adjustments in 2017 will be neutral, positive or negative up to 4 percent. This will grow to 9 percent by 2022.

Participation in an advanced APM allows physicians to earn a 5 percent lump sum incentive payment each year from 2019 through 2024 and avoid MIPS reporting requirements and payment adjustments. The final rule firms up details on what programs will qualify as advanced APMs. First, to qualify, advanced APMs must meet three requirements: Use certified EHR technology, base payments on quality measures comparable to MIPS and require providers to bear more than nominal risk. Beyond that, advanced APMs must also be an approved model by CMS.

With the criteria for MIPS in mind, the clinical documentation aspect of the revenue cycle becomes extremely important, not only because it impacts what the health system is going to be paid, but also because it influences what the physician is likely to be paid as well, says Christopher Kerns, who leads many research efforts of Advisory Board's flagship membership program, the Health Care Advisory Board.

"So this adds a new layer of complexity for how physicians have to document their care, and that creates a new layer of complexity when it comes to the back end of the revenue cycle for coding and any documentation specialist that has to ... create a claim," he says. "So it adds a new layer of complexity and a new layer of reimbursement risk to individual physicians if they get this wrong."

The second category in which MACRA influences RCM relates to physicians who go into an advanced APM.

In this case, the issue will be more about documenting accurately so physicians can get their risk adjustment scored correctly, says Mr. Kerns. Physicians will have to focus on documentation not only to ensure they are capturing the different aspects of performance that need to be included as part of their reimbursement, but also to ensure they are documenting as accurately as possible to get their risk adjustment correct for all the various advanced APMs that qualify under MACRA and qualify for that 5 percent bonus.

"So that creates yet another additional layer of clinical documentation," says Mr. Kerns. "And when we look at the big picture for MACRA and what it means for revenue cycle, what it means is a greater focus on clinical documentation and a greater focus by both coders and documentation specialists to be able to get the overall accuracy of that documentation up," he says. "But that's probably the single biggest [RCM] challenge [under MACRA]. It's just depending on the track you choose."

Strategies to ensure a smooth RCM transition to MACRA

There are a number of best practices health systems should use to ensure clinical documentation accuracy.

On the inpatient side, The Advisory Board recommends a proactive documentation management process. James Green, a leader of the firm's consultancy practice, says this involves mining data and understanding where physicians have had documentation challenges in the past. Identifying the top two to four documentation challenges, then, educating physicians in those areas, makes a huge difference in the accuracy of the medical record, he added.

Mr. Green says hospitals can leverage this meticulous analytics approach to gain understanding of how the record may underrepresent the care that is delivered and result in a lower diagnosis-related group.

"This [is] a huge best practice that compliments traditional clinical documentation improvement efforts," says Mr. Green.

On the outpatient side, he says it's a matter of managing documentation to ensure an accurate risk adjustment factor. Again, he noted, documentation is critical to achieving this. Physicians must improve templates and the use of their EHRs so their risk adjustment factor reflects the patient care they deliver. "We're really talking about clarifying documentation so that you get a clear picture of the acuity of the case," says Mr. Green.

Another strategy to ensure a smooth RCM transition to MACRA involves communication between the physician practice revenue cycle and the hospital revenue cycle.

Mr. Kerns says this does not necessarily mean hospitals need to integrate their physician practice and hospital revenue cycles, but they need to create a process by which they can communicate effectively because documentation on the outpatient side will affect risk scoring that affects the inpatient side as well.

"So there needs to be a process by which the inpatient, outpatient and physician revenue cycles can communicate with one another. It does not necessarily mean they need to be part of the same infrastructure and that you need to have revenue cycle staff that can do both professional and hospital-based coding, but it does mean that they need to have the ability to connect with each other on a regular basis," he says.

In regard to MIPS, Mr. Barnes from iHealth Innovations acknowledged that having comprehensive documentation inside an EHR is a lot of work. Physician practices, medical groups and health systems have invested billions of dollars in their health IT, specifically in their EHRs. However, these organizations' EHRs are rarely optimized. "In many cases, more technology is not needed…optimizing what you already have is plenty to be successful [under MACRA]," says Mr. Barnes. With that premise, he says hospitals and health systems should ensure their EHR, and health IT in general, is customized to address the main program or any state- or specialty-based programs they're participating in.

With the implementation of MACRA, it is also more important than ever to ensure coding accuracy. Therefore, Mr. Barnes recommends that physician practices engage expert billers and coders to assess their coding system and look for missing charges.

These experts should keep an eye out for issues such as downcoding, upcoding wrong ICD-10 codes or missing modifiers, all of which can lead to money lost for the organization, he says. Overall, iHealth Innovations estimates physician practices, hospitals and health systems lose 5 to 15 percent of annual revenue due to these issues.

Lastly, Mr. Barnes recommends that providers thoroughly read their contracts with commercial payers to ensure they understand the terms, can reduce incorrect patient verification and are able to perform prior authorizations. He also recommends they monitor key performance revenue indicators on a regular basis — at least every six months.

"Every CEO, CFO should know where they are financially and run their practice as a business," Mr. Barnes says. "It's not about seeing more patients, it's about being more efficient."


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