MACRA and the Move to Value-Based Healthcare

The Medicare Quality Payment Program (QPP) encourages providers to deliver high-value care through performance-based payment adjustments under the Merit-Based Incentive Payment System (MIPS), or higher payment updates for participating in Advanced Alternative Payment Models (APMs). Modern Healthcare Custom Media asked KPMG's Larry Kocot about the state of preparedness for the QPP and opportunities to improve the transition to value-based care. Larry leads the KPMG Center for Healthcare Regulatory Insight and provides advice and counsel to companies on corporate strategy and regulatory matters relating to public health care programs, including Medicare and Medicaid.

LK: This spring, KPMG and the American Medical Association (AMA) surveyed 1,000 physicians to establish a baseline understanding of physician awareness of and preparation for the QPP in the first performance year and the opportunities and challenges ahead. Although knowledge of the QPP and its requirements is increasing among physicians across practice sizes, practice settings, and specialties; the survey found that a majority of physicians still view reporting requirements as burdensome. Fewer than one in four feel well prepared to meet reporting requirements in 2017 and less than one in ten physicians feel very well prepared for long-term financial success. These findings suggest that the move to value-based reimbursement remains challenging for physicians, and more help is needed.

LK: Although our survey was released after publication of the CMS proposed rule, the proposed requirements for 2018 appear to reflect an appreciation for some of the early challenges revealed by our survey. The proposed rule should be seen as good news for those still transitioning to the QPP. For example, CMS proposes increasing the low-volume threshold for MIPS eligibility ($90,000 in billable Medicare services or 200 Medicare patients), providing additional flexibility (and bonuses) to physicians in practices of 15 or fewer, and allowing for continued use of 2014 Edition Certified Electronic Health Record Technology (CEHRT). These adjustments would give struggling practices a longer on-ramp to meet requirements and more fully invest in value-based care. Additionally, more guidance on virtual group participation and All-Payer APM qualification will allow physicians to refine and optimize their long-term QPP strategies. The proposed rule supports findings from our survey that the transition to the QPP is a journey requiring an iterative process between providers and payers.

LK: A core vision for the QPP is to increase the transition to Advanced APMs for providers of all sizes, specialties, practice settings, and value-based care experience. However, many providers still lack the knowledge, resources, or competencies to complete the transition to an Advanced APM. Our survey found that more than half of physicians want more APM options for their practice and many are still uncertain about their ability to effectively adopt existing APMs. Practices must reorient both their payment structures and clinical processes to enable patient-focused approaches in order to be accountable for improving outcomes in an at-risk environment. Payment models must evolve over time to fill existing gaps and create opportunities for more physicians to transition to risk-bearing payment models with appropriate financial risks and rewards.

LK: Organizations must assess their systems from a clinical, financial, and technology perspective to identify gaps and develop strategies for successful population health management approaches, reinforced by novel payment arrangements meeting the unique needs and strengths of their providers. KPMG can help prepare organizations for success under value-based payment arrangements through Medicare and other payers by assisting with the development of sustainable clinical and financial processes to improve population health, grow a clinically-integrated enterprise, and deliver improved patient outcomes.