MACRA: What is it and Why is it Important? The Impact and Opportunity of MACRA on the

LaboratoryPatricia Goede, PhD, VP, Clinical Informatics, XIFIN

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• The MACRA Factor – Road to value-based reimbursement models

• Brief review of quality reporting pathways– MIPS– APMs

• Strategies for laboratories to increase their value to providers under MACRA

• Strategies for improving the financial health of the laboratory

Learning Objectives

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• Legislation passed April 27, 2015; Medicare Part B reimbursement• Physician based payment reform • Focus is on value-based payment and quality reporting; move to completely

eliminates fee-for service• CMS estimates 90% of eligible clinicians (MD’s, DO’s, NP’s, PA’s, others)

will participate in MACRA payment reform

Medicare Access and CHIP Reauthorization Act (MACRA)

MACRA’s Goal: “to have a single unified program with flexibility for all physicians that benefits patient care”…

Kate Goodrich, M.D., Director and CMS Chief Medical OfficerCMS Center for Clinical Standards and QualityHIMSS 2017

What Does this Mean?

Physician reimbursement on Medicare Part B claims will be based on the quality of care and how that quality was reported

Physician based with very few exceptions

Reimbursement established and based on composite score derived from all types of submissions (competitive)

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• Quality – a tired, overused and sometimes meaningless term• Ended the broken Sustainable Growth Rate (SGR) formula• Replaced PQRS with MIPS• Replaced Meaningful Use• Established a new framework for rewarding healthcare providers for giving

better care not more care• Combined existing Medicare quality reporting programs into one new

system • Penalties and incentives for reporting quality metrics

MACRA – A “New” Focus on Quality

The MACRA FactorWhy MACRA is Not Going Away

The History and Evolution of MACRA

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Primary Drivers and Investment in Quality Initiatives

Sustainable Growth Rate (SGR) $156B1

Physician Quality Reporting System (PQRS) $41B2

Meaningful Use (MU) and HITECH $36B3

Patient Protection and Affordable Care Act (ACA) 4

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• Legislation to balance Medicare spend through quality initiatives tied to performance

• Medicare spend represented 15% of total Federal spend in 2017• Represents $702 B with a projected growth spend at 4.6%• Pay for performance leading up to capitation and increase in bundled

payments• Impacts all physicians and health systems – Impact on the health system

impacts the lab

The Road to Pay for Performance – A Few Facts

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PAMA and MACRA – The Tale of Two Policies

Implemented Today

PAMA Cost cutting alignment through the CLFS

Jan 1, 2019

MACRAValue-based reimbursement through quality reporting

Jan 1, 2020

PAMA and MACRAImpacts the health system but downstream with impact the labRequires clinical documentation (AUC) –claims will not be paid if missing

The Road to Capitation

CMS.gov Medicare Quality Initiatives and Programs 2018 https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Value-Based-Programs.html

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Medicare Payments are Linked to Value-based Purchasing Models

HHS Value-based Purchasing Goals

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MACRA – Positive / Negative Adjustments

Jan 1, 2019 – Dec 31, 2024

Phase-In of New System

Risk Corridors of +/- 4 to 9% Budget Neutral (Sum = 0)

Laboratories benefit by actively reporting and participating in an additional POSITIVE payment adjustment

• Continued emphasis on measuring outcomes and process improvement• CMS is driving behaviors based on quality through incentives/penalties• Commercial payers adopting value-based purchasing based on quality

(bundled payments)– Aetna has targeted 75 percent of their spending to be in a value based contract by 2020.– Blue Cross Blue Shield health plans across 13 states are providing financial incentives to

their hospital networks for reaching Integrated Care Certification from The Joint Commission (eg Coordination of Care).

– Humana has incorporated bundled payments for hip and knee replacement surgeries.– Cigna Collaborative Care has value-based arrangements with over 160 primary care

physician groups and 70 value-based arrangements with specialty practices in the fields of obstetrics/gynecology, orthopedics, gastroenterology, general surgery and cancer care.

Industry Trends: Navigating the Changing Financial Landscape

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• United Health Group nearing 50% value-based reimbursement through the third quarter of 2018 (reported 10/19/2018)

– If United's value-based spending continues growing at this rate, the payer will surpass its goal of $75 billion by 2020

– Approximately half of UHG value-based spend is in the more progressive relationships that orient around population outcomes following the Alternative Payment Model approach

• Requirement to keep abreast of changes with payer policy; not just CMS• Awareness that labs and pathologists need to define and communicate their

value

United Health Group - Value-based Pricing and Reimbursement

Becker’ ASC Review https://www.beckersasc.com/asc-coding-billing-and-collections/unitedhealthcare-nearing-50-value-based-reimbursement-3-insights.html?origin=rcme&utm_source=rcme

Quality Payment Program (QPP) MIPS Reporting and APMs

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• CMS Medicare Quality Payment Program (QPP) formerly PQRS– Merit-based Incentive Payment System (MIPS) – Alternative Payment Models (APMs)

• Steward of quality reporting and scoring through MIPS and APMs• All entities report to QPP including individuals and groups• Beginning January 1, 2019, Medicare payments will be influenced by data

reported to Quality Payment Program (QPP)

CMS Quality Payment Program (QPP)

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Labs Group Reporting Pathway

Labs that employ their pathologists • Pathologists that assign their billing rights to a single TIN• Labs that have a relationship with an external pathologist and or physician such as

radiologists and oncologists

Labs that support physician’s reporting requirements under MIPS • Care coordination with radiologists and oncologists• Education and patient support with external physician providers

Reporting is through a Qualified Clinical Data Registry (QCDR)• Most labs will report via a QCDR for the specialty specific measures

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Two pathways/tracks are offered under QPP:

Medicare Quality Payment Program (QPP) Pathways

QPP

Alternative Payment Models (APMs)

Merit-based Incentive Payment System

(MIPS)90% of pathologists and

radiologists will fall into the MIPS track – non-patient

facing

10-15% of eligible clinicians and ACOs will fall into the APM

track – patient facing

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Two pathways/tracks are offered under QPP:

CMS Quality Reporting: Merit-Based Incentive Payment System (MIPS)

QPP

Alternative Payment Models (APMs)

Merit-based Incentive Payment System

(MIPS)90% of pathologists and

radiologists will fall into the MIPS track – non-patient

facing

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• Payment adjustment based on evidence-based and practice-specific quality data

• Provides a track to demonstrate high quality, efficient care supported by technology

• Reporting for non-patient facing eligible clinicians (pathologists)

MIPS Reporting for Labs - Non-Patient Facing Clinicians

85% Weighted 15% WeightedReference: https://qpp.cms.gov/mips/what-to-report

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Data Requirements for Calculating Quality – Straightforward

Numerator

• LIS pathology reports

• Diagnosis, stage, histologic type

Denominator

• Accessions submitted to CMS

• Patient demographics, ICD, CPT

Clinical Improvement

Activities

• Document quality and clinical improvement activities

• Curated and managed data

• Based on data validation plan to self attest with CMS

Audit Log for Data Submission

• Data validation plan

• Methodology and audit log for data submission

• Developed to identify and comply with QCDR-QPP data submission requirements

• Already part of SOPs

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• Example of a CCD report– Case-mix summary report

• Clinical measure report for Coordination of Care

• Adheres to MIPS reporting requirements

– Format is compliant with CMS QPP portal requirements

• ACTIVITY ID - IA_CC_12• SUBCATEGORY NAME Care

Coordination• ACTIVITY WEIGHTING - Medium

Clinical Improvement Activities – Coordination of Care

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Two pathways/tracks are offered under QPP:

CMS Quality Reporting: Alternative Payment Models (APMs)

QPP

Alternative Payment Models (APMs)

Merit-based Incentive Payment System

(MIPS)10-15% of eligible clinicians

and ACOs will fall into the APM track – patient facing

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• Designed for physicians and providers to form groups coordinated high quality care (ACO models)

• Focus on delivering quality and cost efficient care and shared risk• Advanced APMs – determined by a CMS formula that calculates a threshold

score• Score is calculated from numerator and denominator (like MIPS)• Contain multiple tracks like MIPS

Alternative Payment Models

CMS Alternative Payment Models and Advanced APMs https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/QP-Methodology-Fact-Sheet.pdf

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• Advanced APMs• Participation on APM boards – strategic participation in health system APM

to establish a presence• Integrate with the health system – stickiness

APMs - Strategies for the Lab

Laboratory Value-based Strategy

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• Value-based reimbursement is here to stay – need to deliver more than just low prices

• Payors want to contract with laboratories and other providers that can improve patient outcomes, help physicians reduce unnecessary utilization, and lower the cost of care

• Regional labs with established physician and patient relationships provide higher quality results – TAT, local access

• Labs and pathologists engaged in definition of clinical and financial value

The Laboratory is Key to the Health System

www.XIFIN.com

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• Laboratories play a key role from a diagnostics and quality perspective

• Diagnostics provide the basis for downstream quality reporting– Radiology and oncology in cancer care– Key to full spectrum of patient encounter reporting

• Laboratories become the supporting network for physician partners– Support the their clients reporting needs – clinical documentation– Support for referrals – patient navigation

Why is this Important?

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Strategies for Quality Data Use and Improving the Financial Health of the Lab

Quality DataDesigned for coordinating optimized patient-care through multidisciplinary-team collaboration

Submit clinical notes with appeals• Establish medical necessity• Demonstrate how results were

used to guide treatment

MACRA/MIPS reporting• Develop quality metrics reports• Document healthcare team

collaboration & clinical improvement activities

Leverage patient data pool• Establish Clinical Utility

Improve Reimbursement Improve Payor Coverage

Develop New Revenue Streams

Repurpose aggregated patient data sets• Reuse data for research

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• Quality reporting to avoid penalties and qualify for incentives - MACRA• Improve reimbursement through data driven documentation for prior

authorization and appeals• Payor coverage - data sets can be used to establish clinical utility,

necessary for coverage• Contracts – Quality lab data used to negotiate contracts with the health

system• Data curation to enable new lines of business through high value data

aggregates for research and drug discovery (pharma)• Continued emphasis on value for high complexity testing (molecular and

NGS)

A View on Quality as the New Revenue Model

www.XIFIN.com

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• Is MACRA going away? Not likely• Large investment in programs that lead up to MACRA1

• Strong bipartisan support as a deficit reduction measure• Value-based pricing is not tied to ACA• All about the data and use of data to determine patient outcomes that

leads to policies on future reimbursement• Embrace quality initiatives and develop an ROI

– Data curation for reporting to avoid penalties or incentives– Quality data used in payer negotiations and negotiations with health systems– Outcomes data to enrich existing aggregates provided to pharma and other external entities

A Few Final Thoughts

1. Federal General Accounting Office on HITECH and Meaningful Use. https://www.healthit.gov/sites/default/files/globalevaluationquarterlyreportjanuarytomarch2015.pdf

Thank You

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1. Federal investment on SGR alone over the past 12 years has exceeded $150 Billion2. CMS Total Cost and Shared Savings for Quality Initiatives

https://www.cms.gov/newsroom/search?search=total+cost+of+PQRS+program&search_api_language=en&field_date%5Bmin%5D=&field_date%5Bmax%5D=&sort_by=field_date&sort_order=DESC&items_per_page=10

3. Federal investment in the HITECH and Meaningful Use initiative exceeds $35 Billion as of 2016 https://dashboard.healthit.gov/report-to-congress/2016-report-congress-examining-hitech-era-future-health-information-technology.php

4. Congressional Budget Office Reports https://www.cbo.gov/topics/health-care/affordable-care-act5. CMS.gov Medicare Quality Initiatives and Programs 2018 https://www.cms.gov/Medicare/Quality-

Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/Value-Based-Programs.html6. Becker’s ASC Review https://www.beckersasc.com/asc-coding-billing-and-

collections/unitedhealthcare-nearing-50-value-based-reimbursement-3-insights.html?origin=rcme&utm_source=rcme

7. Dark Intelligence Report https://www.darkintelligencegroup.com/the-dark-report/pathology-trends/pathology-groups-act-now-define-value/

References