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The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is the new value-based payment system for doctors who treat Medicare patients. In previous posts, we introduced MACRA’s Quality Payment Program (QPP), including requirements for the Merit-based Incentive Payment System (MIPS) pathway and the Advanced Alternative Payment Model (APM) pathway. These posts explored how health systems must simultaneously focus on achieving the best performance under MIPS while defining and executing a roadmap to achieve Advanced APM qualification to generate the most value under this new payment model.

But to best position themselves for the long term, healthcare systems also need to pay attention to where advanced APMs are headed, and what competencies will be required to get there.

An APM is a payment approach that gives added incentive payments for providing high-quality and cost-efficient care. Advanced APMs let practices earn more for taking on some risk related to outcomes across a defined patient population, or for a bundled service where providers are incentivized for delivering high quality, cost-efficient and well-coordinated care.

In January 2015, the U.S. Department of Health and Human Services (HHS) set explicit goals to increase the adoption of value-based payments and alternative payment models, including Advanced APMs. As part of this initiative, they adopted a framework categorizing healthcare payment according to how providers receive payment for care, and they announced the creation of a Health Care Payment Learning and Action Network (HCP-LAN) to increase the adoption of value-based payments and alternative payment models. The HCP-LAN’s Alternative Payment Model (APM) Framework lays out the pathway to shared risk and population-based payment, which is the basis for the MACRA QPP.

Advanced APMs are a Medicare-specific version of the industry shift toward value-based contracting and population health management (PHM). In general the focus is on tying reimbursement to achieving specific quality and patient engagement targets. To succeed in the value-based payment world, health systems will need to be proficient in the same competencies under APMs as for population health management. 

Successful competencies

While health systems may adopt different paths on the continuum from MIPS to Advanced APMs, a set of common elements form the basis for success. These include creating and participating in provider networks, establishing value-based metrics for managing care and improving performance, and supporting the development of robust health information technology infrastructure.

From an operational perspective, healthcare systems should be ready to collaborate with other network providers who are participating in an Advanced APM and they should have someone on the team who is experienced in establishing and managing at-risk contracts, which are a key component to the advanced APM model. The team should also include people with the skills to minimize patient leakage, develop care management campaigns to attract patients to the network, and to measure care management performance.

Being able to measure and analyze performance metrics is key to demonstrating success in this value-based payment environment. All of MACRA is built around the idea that technology will provide the capabilities to inform decision-making, measure performance and outcomes, enable data liquidity, and operate in a heterogeneous environment of data sources. That requires strong capabilities in data management and related EHR-agnostic technology skills, and a governance structure that supports efficient operational, clinical and IT decision making. By building all of these elements into their MACRA strategic plan, healthcare systems will be best positioned to:

  • Grow and manage a network of providers and enter into risk-based contracts that are tied to incentives.
  • Engage patients and coordinate their care to produce improved outcomes.
  • Align with the provider’s MIPS and APMs performance measures, and establish process improvement mechanisms to act upon opportunities identified.
  • Create a robust portfolio of information technology capabilities that enable efficient and effective care delivery, care coordination, and the analytics needed to understand performance.

Such competencies do not happen automatically, nor do they happen organically.  Health systems need a deliberate plan and focused execution to give staff access to accurate information when needed to make decisions, guide clinical care and operations, and report to external entities.

MIPS was made easy for this first transition year with the flexible “pick-your-pace” options, but looking down the road to 2018 and 2019, the path to qualification for inclusion in an Advanced APM will not be quick and easy, so  time is of the essence.


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Topics in this blog post: Electronic Health Records, Evidence, Healthcare, Payers