EXECUTIVE SUMMARY
The Medicare Access and CHIP Reauthorization Act (MACRA) changes Medicare reimbursement to align it with goals to cut costs and decrease readmissions.
- Under MACRA’s Merit-based Incentive Payment System (MIPS), providers earn a payment adjustment based on evidence-based and practice-specific quality data.
- With the Advanced Alternative Payment Model (AAPM), providers are reimbursed under a model that is similar to accountable care organizations.
- The AAPM is more likely to increase reimbursement and need for care coordination and case management.
The Medicare Access and CHIP Reauthorization Act (MACRA) likely will enhance the value of care coordination services, focusing on decreasing readmissions.
Since CMS released the final rule on Oct. 14, 2016, healthcare organizations have learned that the push toward population health, which makes case management more prominent, is a chief objective. But whether this focus changes with the new presidential administration is unknown.
“There has been so much focus on post-discharge, and now it’s focused on decreasing readmissions, managing the social determinants of health, and care coordination prior to an event,” says Susan Nedza, MD, MBA, FACEP, senior vice president of clinical outcomes management with MPA Healthcare Solutions, a healthcare analytics consultancy in Chicago. Nedza previously has worked for CMS and is an adjunct assistant professor in the department of emergency medicine at Northwestern University in Chicago.
“MACRA was put in place as a way to provide incentives for physicians to improve quality and impact cost,” Nedza says. “It’s a replacement for a system that hasn’t worked for a number of years: the sustainable growth rate.”
The sustainable growth rate (SGR) formula was very flawed, she notes.
“Spending kept going up on physician services, and the government didn’t cut physician fees,” Nedza says.
The SGR concept was that Medicare spending would grow at no more than 2-3% per year, but it never worked, says Gary Pritts, president of Eagle Consulting in Cleveland. Eagle Consulting works with hospitals and physicians on MACRA and other healthcare issues.
“The growth was way beyond that, and the formula called for a pretty substantial chop to physician reimbursement each year over the past 15 to 16 years,” Pritts says. “It was so substantial that Congress negated it each and every year.”
Finally, Congress decided to eliminate the SGR and passed MACRA to fix the problem, he says. MACRA’s two goals are quality and managing costs.
MACRA’s value-based Quality Payment Program (QPP) consists of the Merit-based Incentive Payment System (MIPS) and the Advanced Alternative Payment Models (AAPM).
Physicians have a choice between MIPS and the AAPM, which is where the big opportunities are for case managers, Pritts says.
The AAPM is like an accountable care organization (ACO) and Medicare shared-savings program. Physicians in an AAPM will have risk related to their patients’ financial outcomes of care, including hospital admissions, ED visits, hospital readmissions, and anything else that increases healthcare costs, she explains.
“By participating in these alternative payment models, they are eligible for a higher rate of reimbursement,” Nedza says. “So the whole system is set up now to encourage and reward financially participation in a system that really focuses on not just quality, but efficiency.”
Physicians will save Medicare money, but also streamline care, he says.
“In general, the alternative payment models — and to a lesser extent, MIPS — are going to encourage hospital systems and some physician practices to do things smarter and better than they have before, and this is where a nurse case manager can come in,” Pritts says. “For example, in the case of a bundled payment model, good case management can potentially reduce the overall cost of what a hip replacement costs and nursing home costs.”
MIPS lets providers earn a payment adjustment based on evidence-based and practice-specific quality data.
From a care coordination perspective, there are opportunities in both MIPS and the AAPM models, but more in the AAPM.
Healthcare costs continue to rise well beyond the rate of inflation. In 2015, healthcare expenditures increased by 5.8%, a rate that’s not sustainable and suggests a problem with Medicare solvency, Nedza says.
“The whole system has to figure out incentives for hospitals and make sure everyone is getting appropriate care, but not overutilizing services,” she says. “Avoiding unnecessary care is going to be critical, no matter what happens with the Affordable Care Act and what changes.”
President Donald Trump’s administration could make some changes that would make the MACRA programs voluntary.
The U.S. Department of Health and Human Services (HHS) under the leadership of Secretary Thomas E. Price, MD, likely will not favor a mandatory AAPM, Nedza says.
“Dr. Price was a firm opponent of the mandatory AAPM, and he wrote a letter about comprehensive care for joint replacement and forced bundled payments,” she explains. “So most people are betting that he’ll continue those programs, but make them voluntary.”
But there is so much momentum in the direction of quality-based and cost-savings-based incentive programs that the Trump administration may not be able to change the industry’s movement in that direction, he notes.
If MACRA’s incentive programs become voluntary, then many physicians and healthcare organizations may choose to not participate, slowing the shift to what health systems call a value-based or quality-based healthcare payment system, replacing the fee-for-service model. Most experts in the healthcare industry acknowledge that fee-for-service is costly and leads to medical cost inflation.
For private payers, this possible MACRA change could be problematic as one of the ways they’ve saved money is through the use of alternative payment models. “Medicare sets the stage, and everyone else follows,” Nedza says.
“If you participate and have some skin in the game, you’ll be part of the solution and not part of the problem, and that’s the link between MACRA and the ACA,” she says. “What’s at the core is how do we, at a national level — Medicare, Medicaid, private/public payer — manage increasing costs through more efficient care?”
MACRA’s focus on reducing readmissions likely will continue, and this is where case management and care coordination takes center stage.
“The idea is to have someone help you post-hospitalization,” Nedza says.
Case management can make sure patients keep follow-up appointments, receive the therapy and other services they need, and have no medication adverse events.
“As more people age into Medicare, you need more people to manage them and to serve in a care advocate role,” Nedza says. “Case management could expand borders, going into prevention.”
For example, if an elderly person has mobility issues, a case manager can help the person manage mobility around the home prior to hip replacement.
“It really does expand the role of care coordination. I call it care advocacy across the care of a person’s needs,” she says.
MACRA bundled payment and accountable care organization programs will pay for case management and home visits by care management specialists who might not have nursing degrees, Nedza predicts.
If MACRA and its focus on moving away from fee for service is undermined, then healthcare organizations still will use case management but there won’t be adequate reimbursement for it, she says.
“There may not be additional dollars allocated at the federal level for it,” she adds. “Care coordination will continue, but who will pay? What is the extra value of having a RN case manager?”
The Medicare Access and CHIP Reauthorization Act likely will enhance the value of care coordination services, focusing on decreasing readmissions.
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