Surviving the Shifting Reimbursement Landscape

Adele Allison
When you live in a seismic zone, you don’t wait for the ground to start shaking to prepare. You build your home from the ground up with strength and flexibility engineered to help you survive, and you stock up on resources you may need to ride out the aftershocks.

The date and location of the next eight-point quake is anybody’s guess. However, we already know that in 2019 a mega shift will rumble through the financial foundations of healthcare when Medicare Access and CHIP Reauthorization Act (MACRA) rules go into effect, likely sending aftershocks throughout the reimbursement environment. Centered squarely on providers paid on the Medicare Physician Fee Schedule (MPFS), the law, which was passed last April, signaled the beginning of the end for traditional fee-for-service payments.

“After 2018, much of the financial risk in health care is shifting to providers, and the best protection in managing that risk is data,” Adele Allison, director of Provider Innovation Strategies, said.

In addition to being one of the few people who has read the entire 2200-page Affordable Care Act and the 500-page Reconciliation Act, Allison has focused her recent efforts on the provisions and implications of MACRA and how it is likely to affect practice management.

“Providers paid on MPFS will have to choose one of two paths—either Alternative Payment Models (APMs) or the Merit-based Incentive Payment System (MIPS),” Allison said. “APMs offer a five percent incentive payment. This approach is more likely to be used with accountable care organizations (APOs), bundled payments and other models that have the advanced technology resources and strong data and analytics to manage risk.

“At first glance, MIPS is essentially a fee for service model. However, the difference is that payments are variable based on provider performance data. Providers who score in the top quartile will receive a bonus. The other side of the story is that providers in the bottom quartile will receive an adjustment—another way of saying that after review, Medicare can ask for a portion of payments back if scores don’t measure up.”

Provider scoring is weighted using data from the Physician Quality Reporting System, the Affordable Care Act’s Value-based Payment Modifier and Quality Resource Use Report, plus the CMS Medicare EHR Incentive Program or Meaningful Use, and a new category know as Clinical Practice Improvement Activities.

While adapting to these changes will have its challenges, the Medicare cost containment measure is a step toward addressing a real and growing problem in the United States.

“At the time Medicare was established in 1965, 5.6 percent of our GNP went to health care,” Allison said. “Now the cost of care is almost 18 percent of GNP. Compare that to other developed countries with longer life expectancies and an average healthcare cost of 9.5 percent of GNP. When you pay almost double for a less successful outcome, something needs to change. We can’t keep doing the same thing and expect the problem to get better.

“Payers, including government, commercial insurance and patients themselves, who are responsible for a growing share of costs, are pushing for changes. Instead of the episodic way we deliver healthcare now by reacting when there is a problem, we’re moving toward an emphasis on preventing problems by working toward wellness and better managing chronic conditions. It costs less to help a diabetic manage his diabetes than to treat his expensive heart attack later.

“Instead of paying for quantity of procedures, we’re moving toward quality of results in value-based payment. The data associated with services performed will be used to vet the value of care, and reimbursement will be made accordingly. That data will be transparent to both payers and to the 26 percent of patients who go online looking for information to help them decide which doctor and hospital they should choose.”

What can providers do to put themselves into a better position to succeed when new reimbursement rules take effect?

“Document, document, document,” Allison said. “Now is the time to make sure your practice is set up to capture data that accurately reflects the value of the treatment you provide. This data will also be an important tool for decision making in tracking which treatments give your patients the best value in outcome relative to cost.

“It’s also important that in your records, your description of the patient’s condition is specific. The charges a payer would expect to see if you use boilerplate “diabetic” language is very different than the cost of complications for a brittle diabetic with renal and vascular damage.”

Some cities in Alabama are already participating in a Medicaid program that pays a flat sum for knee and hip replacements. Allison suggests that practices begin their own internal tracking to see how well they would do in a similar situation.

How patients evaluate their experiences with their doctor is also becoming a greater consideration with both payers and potential patients. Tracking patient satisfaction and looking for opportunities to improve can make a difference. Good communication with patients can help manage expectations so they have a realistic understanding of what can be done to help them. It can also help with compliance and encourage patients to report minor difficulties before they become major problems.

“We also need to take a close look at the people we work with in caring for patients,” Allison said. “It’s not enough to simply refer a patient to a physician you knew or liked in med school. You need to know how that physician is scoring on outcomes because how well he does in helping your patient can affect your scores, too.”

So how do you check to make sure you’re referring patients to the best resources for their condition? For that matter, how do you see how you’re doing and whether your efforts are nudging the numbers in the right direction as 2019 approaches?

“There are several rating services online, but one of the best things to do is check what’s important with payers and see how you rate with them. You can go to the Blue Cross website, and under ‘find a doctor,’ enter your zip code and specialty. You can see where you stand based on data from your actual past cases.            

The bottom line is that data will drive the healthcare economics of the future.


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