American Association for Physician Leadership

Finance

MACRA Meets Your Revenue Cycle: Four Steps for the Value Journey

Justin T. Barnes

February 8, 2017


Abstract:

The shift from fee-for-service to value-based reimbursement models represents one of the biggest billing transitions and greatest financial opportunities for physician practices. On the heels of ICD-10 adoption and against the backdrop of new digital infrastructure and workflows, practices face a new journey toward the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the Quality Payment Program. Knowledge of how to traverse the path, navigate the intersections, and optimize the opportunities of healthcare payment reform is essential.




For the better part of the past decade healthcare has been immersed in technical overhaul. Electronic health record (EHR) systems and other IT implementations have warranted big investments on the part of providers, in terms of both time and money, as the industry worked to pave the way for health data capture and exchange. Although technology efforts built the necessary digital infrastructure for value-based care models and the new CMS Quality Payment Program (QPP), most practice managers remain so mired in the daily blocking and tackling of patient throughput and billing that they lack the time and expertise to take full advantage of the quality incentive program recently formalized by the Medicare Access and CHIP Reauthorization Act (MACRA) final rule.(1)

For practices with the right strategic guidance and resources in place, MACRA’s QPP incentives could represent significant earnings, as well as penalty avoidance under new value-based care models. This article offers an executive overview of the new Medicare reimbursement landscape and suggests specific steps that practices can take to protect revenue streams today and ensure they thrive tomorrow.

The New Reimbursement Landscape

MACRA’s inaugural reporting period commenced on January 1, 2017, and will impact Medicare payments beginning in 2019. MACRA replaced former Sustainable Growth Rate reimbursement provisions in favor of a quality payment model designed to foster better patient outcomes through reenvisioned pay-for-performance models. Physician practices have two reporting tracks under the QPP: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). Most eligible clinicians are expected to report under MIPS for the 2017 reporting year.(2)

Before release of the final rule in fall of 2016, more than 50% of clinicians reported that they were unfamiliar with MACRA.(3) To ease the transition and help providers avoid negative payment adjustments in 2019, CMS cemented first-year reporting flexibility in final legislation. The 2017 reporting period offers “pick your pace” options including those listed here:

  • Option 1: Submit test data: Meet minimum reporting requirements by submitting data on at least one quality measure or improvement activity, or the required base Advancing Care Information measures to avoid a negative payment adjustment or penalty.

  • Option 2: Partial reporting period: Providers who submit more than one quality measure, more than one improvement activity, or more than the required base measures in Advancing Care Information for a period of 90 days can earn a neutral or small positive payment adjustment.

  • Option 3: Full-year reporting: Submit QPP data for more than 90 days, up to the full 2017 reporting period to qualify for a moderate positive payment adjustment and exceptional performance bonus opportunity.

  • Option 4: Non-participation: Failure to submit 2017 quality reporting data will result in a negative 4% payment adjustment.

Starting in 2019, 4% of MIPS-eligible clinicians’ fee-for-service payments will be redistributed, increasing to 9% by 2022. Clinicians practicing under Medicare for the first time in 2017 and those who bill less than or equal to $30,000 in Medicare or treat 100 or less Medicare Part B patients are not eligible to participate. Alternatively, clinicians may participate in qualified Advanced APMs for a 5% annual bonus if Medicare payment (25%) or patient volume (20%) thresholds are met.

Today’s fee-for-service models will no longer exist in their current form within the next three years.

Regardless of which reimbursement track you choose, today’s fee-for-service models will no longer exist in their current form within the next three years, as clinical practice improvement and quality-based reimbursement evolves. With ample flexibility built into the initial reporting period, now is the ideal time to understand your options, embrace the QPP, and refocus your revenue cycle accordingly.

Four Cornerstones for Revenue Cycle Success

During this inaugural year, practice managers and finance executives must take the time to consider new revenue cycle management goals with fee-for-value in mind. Five strategic hurdles to conquer in 2017 include:

  • Navigating increasingly complex payment models;

  • Stabilizing existing revenue cycle process challenges;

  • Optimizing EHRs for clinical documentation, coding, billing, and quality reporting;

  • Managing the wellness of contracted patient populations; and

  • Developing reimbursement and care delivery models to fortify revenue streams.

Four important steps, discussed in the following sections, must be taken in the journey from fee-for-service to fee-for-value.

Get the Right Expertise in Place

As the industry embraces value-based reimbursement, the emphasis on building high-performance revenue cycles in practices has never been greater. Today’s practice faces the arduous task of traversing complicated payment models, fee schedules, and risk-based contracts while also tending to the crucial business of courting patients.

Very few practices have dedicated resources in-house to help effectively navigate new payment reform and migrate from managing to streamlining their revenue cycle. The single greatest asset practices can invest in during this critical time is expertise to help address the new, manifold needs of an evolving medical practice business.

The onus is on providers to understand the payment models, initiatives, and contracts being offered to other like-sized practices and specialties in your community. Options are not likely to be brought to you proactively; rather, you will need to seek them out or inquire about them with the payers. Look for consulting partnerships or in-house quality reporting program directors to:

  • Garner competitive intelligence in your market to know what you’re competing against and articulate your unique patient draw;

  • Define potential costs to your practice and weigh those against your earning potential;

  • Understand your practice’s specific data strategy, needs, and goals as they relate to your chosen QPP reporting path;

  • Know where data need to move to generate more revenue; and

  • Manage patient care according to specific populations, contracts, and identified risk.

Finally, the healthcare industry is beginning to see consultants and finance software vendors engage in “at risk” partnerships with providers. Finding expertise through a partner that will go at risk with you—an ally that gets paid based on what you get paid—will be a provider’s first line of defense.

Plug Existing Revenue Cycle Leaks

One aspect of practice management that has changed dramatically over the past two years is the growing number of roadblocks to clinicians getting paid. Current revenue cycle processes must be optimized to protect existing revenue streams—before a successful shift to value-based payment can occur. There are three fundamental areas to assess and improve:

  • Medical coding: Revenue growth of anywhere from 10% to 100% can be facilitated through accurate coding. Renewed emphasis on coding, compliance, and credentialing can help avoid leaving revenue on the table. Have the right coding documentation support in place, examine audit coding practices every three to six months, and keep up with coding updates as part of your annual practice review process.

  • Denial management: White-glove medical claim submission prep work coupled with routine internal self-audits can help your practice circumvent as many as 80% to 90% of costly and time-consuming claim denials, which often amount to high volumes of lost revenue. Be tenacious and persistent in chasing down every dollar due to you.

  • Payer contract analysis: Ninety percent of practices never match up actual payment with the amount contracted for with payers, which often results in uncollected revenue. Every payer is attacking payments differently. Understanding the roadmap to collecting revenue due to you is an important component in contract renewal negotiations with payers.

Each of these revenue protection tactics can be put in place by any and all physician practices today, regardless of how you have elected to proceed under the QPP. You should routinely monitor these and other key performance indicators to track progress over time and identify revenue cycle threats before they become significant financial disruptions.

Looking at all the right aspects and collecting 75% to 95% of billed amounts can help avoid being cash-crunched. Protecting and recouping revenue streams today offers financial relief as you look to invest in other areas of revenue cycle workflow management down the road. Bill and collect what is due to your practice. It will fund everything needed to assemble the right team and successfully navigate MIPS and APMs.

Optimize EHRs to Match Your Reimbursement Strategy

Once you have a firm knowledge of how MIPS or APMs affect a practice of your size and specialty, begin the process of customizing your EHR technology to help meet specific quality reporting requirements. Use IT staff or outside expertise to take stock of IT infrastructure and resources, and to implement the various performance tracking metrics.

The latest version of most top-end EHRs should offer the functionality needed to meet your goals. However, no EHR comes out of the box ready to function in any of the new payment models, so customization is required. You will need resources to:

  • Understand the metrics you need to be tracking for your particular payment model;

  • Implement associated analytics dashboards;

  • Make sure you can measure yourself and hit the quality metrics you need to hit;

  • Set up and use the technology to get you there;

  • Test and submit reporting metrics; and

  • Continually customize for your workflow.

Technology only gets you about 25% of the way there; execution of these initiatives makes the real difference. Although most EHRs are equipped to help providers meet MACRA requirements, 15% to 25% of practices are likely to encounter technical limitations in their existing platforms that necessitate an EHR replacement strategy.

Embrace Consumerism in Healthcare

Healthcare consumerism now plays a significant role in physician practice revenue cycles. Anywhere from 5% to 15% of provider payments will be tied to patient satisfaction under quality reporting programs. Happy patients tend to return to providers they have positive experiences with. Those same happy patients are also more likely to recommend a practice to friends and family. Poor patient experience elicits the opposite effect. Don’t give consumers a reason to ding you on patient experience, or a reason not to come back. Patient voice and patient choice, the driving forces behind consumerism in healthcare, directly impact physician practice revenue streams.

The public nature of MIPS scores, set to be published under MACRA requirements, could also impact provider traction with patients. While many providers are fearful because performance scores are an unknown prior to publication, practices that take advantage of marketing opportunities based on positive ratings stand to attract more patients. More practices need to get inside that marketing game, which is a standard business protocol in other industries.

Patient satisfaction is based on patient experience.

Another piece of healthcare consumerism that providers should be attuned to is ease of doing business. From online scheduling to assistance navigating medical campuses, people want simplicity and ease and are apt to pick the provider that most closely meets those needs. Use online portals on your website for scheduling. Make it easy to get patients in the door.

Patient satisfaction is based on patient experience. Much of that experience is at the front- and back offices, rather than “in the middle” with the provider. Ease of working with the practice at the front end for scheduling and payments and a positive experience on the back end with billing are likely to have the greatest impact on customer satisfaction, and can easily be improved for little cost, yielding a large return on investment.

Leveraging the many patient convenience innovations in today’s market can boost your appeal to patients. As a key part of your patient engagement strategy, extending patient interaction outside the walls of the practice is essential.

Conclusion

Whether your practice has been successful in the past and is looking to maintain that position under QPP, or your practice is struggling with known or unknown revenue cycle barriers, foresight and willingness to engage knowledgeable outside partners could mean the difference between growth and stagnation. For most practices, this is not a road to walk alone. More technology is not the answer. In many cases, better use of existing technology investments will yield the most exponential benefits.

Clinicians who embrace the concept of running their medical practice like a business will fare well under MACRA and in the shift to value-based care across all payers, not just CMS. Proactive practices that are well versed in payment reform initiatives and have the right team and infrastructure in place to effectively execute the complex business initiatives facing clinicians today will be well prepared to thrive going forward.

References

  1. Medicare Program: Merit-Based Incentive Payment System and Alternative Payment Model Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models. Federalregister.gov . www.federalregister.gov/documents/2016/11/04/2016-25240/medicare-program-merit-based-incentive-payment-system-mips-and-alternative-payment-model-apm .

  2. MACRA Notice of Proposed Rule Making (NPRM) Summary of Identified Key Provisions in the Proposed Rule. Nationalpartnership.org . www.nationalpartnership.org/research-library/health-care/HIT/cbc-cpeh-summary-macra-nprm.pdf.

  3. MACRA: Disrupting the health care system at every level. Deloitte; www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/macra.html

Merit-Based Incentive Payment System

Payment incentives or penalties are issued based on Composite Performance Scores relative to other eligible clinicians on a scale of 0 to 100. MIPS scores are weighted as follows:

  • 60% Quality (replaces Physician Quality Reporting System)

  • 25% Advancing Care Information (replaces Medicare Meaningful Use)

  • — Cost (replaces Value-Based Modifier; factors in starting in 2018)

  • 15% Improvement activities

$500M in Exceptional Performance bonuses will be awarded annually to participants with the highest MIPS scores.

$20M per year for five years has been provisioned in training for rural and small practices (≤15 clinicians).

Justin T. Barnes

Partner and Chief Growth Officer, iHealth Innovations; phone: 404-538-0707; e-mail: justinbarnes@ihealthinnovations.com; website: www.iHealthInnovations.com; Twitter: @hitadvisor.

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