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How MACRA Legislation Advances Value-Based Care Reimbursement

Both private healthcare payers and providers will likely begin to move toward value-based care reimbursement due to a push from MACRA legislation.

MACRA legislation may play a major part in advancing the adoption of value-based care reimbursement among both payers and providers. CMS Acting Administrator Andy Slavitt emphasized this past May that MACRA legislation will bring real progress to quality metrics and value-based care payment.

MACRA Legislation

“Like the major change we went through as we improved access to coverage, we are now on the cusp of an equally transformative change in quality and affordability — paying physicians and hospitals for providing the right care,” Slavitt said.

Providers serving Medicare beneficiaries will become more ingrained in value-based care reimbursement due to MACRA legislation. There will be two avenues in which to participate and receive financial incentives from MACRA requirements - the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Model (APM).

Health payers would be wise to reduce administrative burden on providers by adhering to payment contracts that align with MACRA legislation and value-based care reimbursement.

Beckie Croes, Senior Vice President of Provider Engagement at CareAllies, spoke with HealthPayerIntelligence.com and provided her viewpoints on how MACRA legislation will impact health payers in the coming years.

“Providers that have already embraced value-based reimbursement models through commercial or Medicare Advantage insurance are a step ahead in this whole process. They determined these models are necessary and a growing component of their revenue stream and, more importantly, they’ve already committed resources to help them internally to ensure success in value-based care,” Croes explained.

“Those folks are going to find the transition relatively simple. They’ve already developed systems around how you work in those populations and they won’t be as traumatized by the impact of MACRA regulations,” she continued. “For providers that have not been working in a value-based care reimbursement arrangement and resisted entering into those arrangements with payers, they really need to pick up a strategy fairly quickly.”

For example, providers who don’t have as much experience will need to consider whether or not to participate in an accountable care organization. Providers will need to decide how to work with payers to bring products to the market. Consulting companies could provide assistance in building a roadmap for value-based care reimbursement strategies. Additionally, payers and providers will need to determine if their patient base could use assistance from outside of these organizations and whether to build value-based relationships with community agencies.

“Payers are impacted in two distinct ways,” Croes noted. “One of those would be a halo effect. As providers are developing their MACRA strategy and their value-based care strategy, that would be around improvement in clinical workflows, improvement in how they address their patients as a population, and they are going to have to determine from a physician engagement perspective, what that construct will look like. That is going to spill over into other lines of business even outside of Medicare fee-for-service.”

“Providers that had been hesitant to join value-based care arrangements with payers may be more likely to join and participate in those relationships since they’re going to be forced to make those changes in their workflow to support their Medicare patients,” she pointed out.

This means that payers will have more business and revenue coming from providers looking to create value-based care reimbursement contracts. MACRA legislation would essentially bring more profit for payers in the value-based care arena.

The quality of medical care is also expected to improve due to alternative payment models, Croes explained. Also, transitioning from fee-for-service payment structures to value-based care reimbursement is expected to be challenging for payers and providers.

“Providers have to maintain the traditional fee-for-service business that, even though it will be changing for MACRA and other initiatives, it’s still keeping the lights on today for them,” Croes said. “At the same time, they have to be willing to commit the resources to developing those capabilities or determining whether to outsource those capabilities and figure out how they will pay for that.”

“They need to figure out how to develop that at the same time they are still committing resources to their current lines of services,” she explained. “If they’re not willing to commit those resources now, they may find themselves lagging behind other providers and potentially losing market share. Not only are traditional fee-for-service opportunities declining but their market share could be declining as well. I think the biggest struggle for them is that there’s no silver bullet here. There’s no software or IT platform that they can implement that will overnight transform a practice toward value-based care.”

Croes further described how physicians will need to be engaged in the value-based care process before their medical practice can truly transition to alternative payment models. Payers will need to provide actionable data to providers and assist with making a “robust action plan” so that a smooth transition to value-based care reimbursement is possible.

“From a payer perspective - who will be seeking to increase the number of value-based arrangements they have and the percentage of medical spend in those relationships - they need to be accepting of the willingness and readiness of the provider community to be successful in this relationship,” Croes said. “In terms of a payer offering any number of value-based reimbursement methodology in the marketplace, when the provider accepts the arrangements, if they don’t have the right level of physician engagement or the right tools, they won’t perform as well as expected. That means the health plan won’t perform as well as expected.”

This means that payers will need to consider what type of assistance they can offer to providers in order to ensure success in value-based care reimbursement. This may include help with data analytics, management support, or clinical resources, Croes explained.

 

Dig Deeper:

How Medicare, Medicaid, and CHIP Guide the Health Payer Industry

How Payers Should Prepare for Value-Based Reimbursement

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