Why the MACRA start date debate misses the point

After reading recaps of the July 13 Senate Finance Committee hearing on MACRA, the headlines everywhere focused almost solely on a possible MACRA delay.

CMS Acting Administrator Andy Slavitt did admit he was “open” to delaying MACRA’s implementation amid a bunch of industry feedback and questions about provider readiness, but it hardly sounded like the main takeaway from the hearing. In fact, elements of his opening testimony referenced resources that are ready to help rural provider practices adjust to the new requirements. To me, he sounded like a man ready to keep the train rolling on time.

Now, there’s no doubt that CMS understands that MACRA—with all of its quality metrics, rules and timelines—represents massive healthcare reform that will be difficult for many stakeholders to address from a technology standpoint. The American Medical Association asked for a transitional period and noted that small group practices need more flexibility. Consulting firm Deloitte, which has put significant resources toward understanding MACRA and greater payment reform initiatives, just released a survey that found that half of physicians are unaware of the significant payment changes coming in 2017.

CMS undoubtedly wants to roll MACRA out the right way, and the multitude of comments from groups everywhere very well may prompt a delay to happen. Many comments noted that the time required to update systems, especially from groups with limited resources that will need to integrate better technology, was going to make it difficult to comply with the new rules.

However, if the way everything has unfolded is any indication, I’m almost certain it will be a nominal delay, and the rush will still be on to begin scoring provider quality, determine how to pay for every possible situation based on those scores, and ensure that the systems are in place that will be required to quickly and accurately pay claims.

All of the hype so far has centered on the implications, uncertainty and hardships for Medicare providers, but what no one is talking about yet is what MACRA signals for nationwide healthcare reform. MACRA is CMS’ catalyst, designed to spur payment reform for all markets. It is laying the foundation for change in healthcare payments throughout the entire industry, starting in Medicare, expanding to Medicaid and then ultimately through to the commercial markets.

MACRA is the most significant reform in healthcare since the Accountable Care Act passed, and one of the most significant industry developments since the creation of Medicare in the 1960s. During the Senate hearing, Sen. Debbie Stabenow (D-MI), did state “MACRA is a truly historic piece of legislation.”

What’s shocking about it—and why it came as a quasi-bombshell—is that while quality-driven payment models were anticipated and referenced a number of times in the language of the ACA, the government was not expected to be pushing the initiative this soon and this aggressively. The law was passed in April of 2015 by an overwhelming bipartisan coalition in both the House and the Senate, meaning it is almost certainly election-proof.

So, if it is a big push towards full payment reform, why aren’t we talking about what it means for health plans? If providers need to adjust their practices in a value-based-care environment, what about the payment equation? Health plans to date have not adopted a lot of value-based contracts, but CMS’ intent is that it will make up 25 percent to 75 percent of all plans by 2023.

For years, health insurers promised value-based models and new quality evaluations for paying doctors, but progress thus far has been slow. Plans and providers are dealing with many priorities (ICD-10, electronic health records, additional regulatory pressures), and the transition to value-based models is a significant challenge involving people, process and technology. In addition, many health plans are not adequately prepared to handle so many individualized contracts with providers. This creates massive and complex challenges related to processing claims, especially when you can now have an almost endless variety of provider payment arrangements.

If each provider must now be evaluated based on each member outcome to determine the appropriate reimbursement rate for every interaction, the health plans will have an enormous challenge making sense of all of the information—all while attempting to process claims on time, and in an automated way, and while simultaneously arming their customer-service teams with accurate member benefit and reimbursement information.

And how will this affect health plan members—the millions of patients that are supposed to benefit from better quality care?

The added complexity of quickly introducing value-based plans—which will ultimately reach all health insurance organizations—also can create additional customer-service issues for members. Health plans already have significant challenges answering day-to-day member questions, and this added complexity could add further challenges.

You can imagine how complicated it will be when many more individualized arrangements must be implemented and interpreted. This could not only create communication breakdowns between members and health plans, resulting in customer dissatisfaction, but it could also create significant delays in processing and paying claims. As we’ve seen more broadly in healthcare, these types of breakdowns can often result in member surprises related to unexpected medical bills, and they can cause members to endure unnecessary headaches when trying to understand their benefits and payments. And sometimes, unfortunately, the huge cost burdens shouldered by health plans to handle all of this complexity are passed on to the insured.

As the MACRA rule puts more pressure on payers and providers to introduce more value-based contracts, the new quality scores will be visible to the public. Because multiple quality measures may not be viable in the already taxed healthcare ecosystem, the MACRA measures could become the de facto standard for providers beyond Medicare and into the larger commercial market. So health plans will be pushing their participating doctors to get higher scores, because members will revolt if they only see in-network providers with lower scores.

The bottom line is that a lot of the MACRA conversation has focused on providers. However, if ICD-10 taught us anything, it’s that health plans must pay equal, if not more, attention to their readiness to deal effectively with regulatory and other market forces.