Value-Based Healthcare: What is MACRA?


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Physicians can run, but they can't hide from Value-Based Reimbursement. Medicare is changing the way it reimburses doctors in the future to be Value-Based and not just Volume-Based, which is the current fee-for-service payment system in the US today.

David O. Barbe, MD, MHA, current president the American Medical Association (AMA), mentioned that the promise of MACRA, where physicians are rewarded for improvement and for delivering high-quality, high-value care will be fulfilled with patients and physicians benefiting from the new approach.

But what is MACRA exactly and what are its implications for medical technologies in the US?

Defining MACRA

The Centers for Medicare & Medicaid Services (CMS) implemented different Value-Based programs with the aim of rewarding healthcare providers with incentive payments based on the quality of care they give to patients.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is one of these Value-Based programs from the CMS. And while the drive for paying for quality and outcomes as opposed to fee-for-service makes logical sense, implementing these changes has been a challenge.

Clinicians must act now

Eligible clinicians working with Medicare must first determine if they are subject to Merit-Based Incentive Payment System, or MIPS. If so, they need to submit data in 2017 in order to avoid a negative payment adjustment in 2019.

All MIPS-eligible clinicians, regardless of specialty, will be compared to each other and against a performance threshold.

Eligible clinicians not taking part in the MIPS program can select the Advanced Alternative Payment Models (APMs), which still provide incentive payments based on very similar metrics as those used in MIPS.

While the first year for payment adjustments under MACRA is 2019, the performance of eligible clinicians in 2017 will determine those payments. Therefore, clinicians must act now and choose which system, MIPS or APMs, they will take part in; otherwise, they will incur the risk of negative payments in 2019.

Implications for medical technology


First and foremost, never before was value so deeply connected with outcomes and payments. It is crucial for companies to understand how the proposed value of their medical technologies aligns with the value metrics proposed within MACRA.

There is the unique opportunity for clinicians to align a) product value with b) patient outcomes and c) payment incentives. Yet, not all “value propositions” create such powerful alignment.

Electronic Health Records (EHR)

MACRA also changes the way metrics are reported. Clinicians without an EHR can still participate in MIPS, but they will not be eligible for any of the points under the ACI performance category and will obtain lower incentive payments.

Also, while it is still possible to participate in MIPS without an EHR, the reporting requirements will be significantly more burdensome for the clinician.

Considering digital health, MACRA increases the potential value of devices that automatically transmit data to EHR platforms. This can foster the adoption of many wearables available today such as monitors for the heart, blood glucose, and many other types of sensors.

Making sense of MACRA

One of the first things medical companies should do is what we at ValueConnected call a “MACRA Assessment.” This assessment maps how the clinical and economic outcomes of a particular medical technology can impact the dozens of components of the MACRA composite score. These components are divided into three areas, which must be assessed separately:

  • - Quality
  • - Clinical Practice Improvement Activities, and
  • - Resource Use/Cost

When there is an alignment between what the medical technology does and what is measured by MACRA, a medical company creates a compelling message about how their technology can create MACRA-related ROI for providers and their hospital partners.

Value-Based Healthcare is here to stay. Are you ready for it?

Since the beginning of this year, ValueConnected has completed several MACRA Assessment projects to help companies understand how their medical technologies relate to the new value metrics. We are ready to share what we have learned, you can reach us at [email protected] to receive a sample report or schedule a discussion to review how your specific medical technology fits within the MACRA metrics.