Industry Watch – November/December 2016

Nov. 17, 2016

Medicare Access and CHIP Reauthorization Act

What the MACRA rule means for providers – in 2018 and beyond

By Eric Cragun, Senior Director, Health Policy, Advisory Board

On Oct. 14, CMS released a final rule to implement provisions of the Medicare Access and CHIP Reauthorization Act (MACRA) in 2017. Much of the analysis around the final rule has centered on the effects it will have next year, but what stands out to me is actually its implications for 2018, 2019, and beyond.

The rule lays out details for the new Quality Payment Program (QPP), which includes the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM) track. (As you can see, one clear impact of MACRA has been an increase in healthcare acronyms.)

For 2017, providers won’t need to alter their current approaches much to succeed under QPP. CMS in the final rule gives providers several options to avoid negative payment adjustments, and we believe all providers should plan to participate to a degree sufficient to avoid any penalty. CMS also exempted an additional 120,000 “low-volume” providers from QPP participation.

In future years, things get more interesting – and CMS’ guidance on how QPP will evolve should play a critical role in providers’ strategies.

By way of context, providers have long asked for better visibility into the future direction of Medicare payment policy. Year-to-year uncertainty was one of the fundamental failings of the system under the Sustainable Growth Rate (SGR). HHS provided some details last year when it rolled out risk-based payment goals for traditional Medicare, but the MACRA final rule offers a more substantial view into the future evolution of Medicare payments.

In our early analysis of the 2,400-page final rule, we have found numerous points of guidance for how CMS plans to develop QPP in the future. For example:

  • CMS anticipates increasing the number of outcome metrics required in future years (only one outcome metric is required for 2017);
  • Although CMS has zeroed out the weighting for cost measures in 2017, the agency plans to weight this category at 10 percent in 2018 and the statutory 30 percent in 2019;
  • CMS also says it will consider introducing additional episode-based cost measures;
    To minimize administrative burden, CMS plans to align and streamline requirements across MIPS categories (and beyond QPP);
  • CMS expects the number of qualified Advanced APMs to increase in future years, including a new Track 1 Plus beginning in 2018 in the Medicare Shared Savings Program;
  • Even so, CMS is solidifying its stance that only APMs with downside financial risk will qualify for the APM track, which holds implications for providers’ long-term APM strategy;
  • The number of providers subject to MIPS will decrease in future years, as more clinicians should qualify for the APM track and many “low-volume” providers will continue to be exempt from QPP; and
  • The number of non-reporters in MIPS is likely to be smaller in future years, increasing the importance of performing well to avoid downward payment adjustments.

One of the key takeaways from that CMS guidance is that QPP will shift providers’ risk in the program from reporting to performance. Once the low-risk 2017 performance year ends, QPP will quickly increase the risk that providers face. As more providers move into the APM track – and the MIPS track becomes more competitive – providers will need a solid strategy for driving toward high performance.

To that end, providers should not view 2017 as a year off. The flexibility CMS offers for 2017 should be viewed as an opportunity to reexamine strategy for Medicare risk-based payment models, reassess and synchronize performance improvement efforts, and ensure that any MACRA-related investments are positioning the organization well for long-term success.

Obviously, some uncertainty remains given the volatility associated with the recent election and impending change in administrations. Congress continues to express strong bipartisan support for MACRA, and we don’t expect legislative changes anytime soon.

Networking

Need an IT silver lining? Go to cloud school

CDW’s new Cloud Planning Services combine consulting and diagnostics to help customers determine which of their applications and workloads make the most sense to move to the cloud. Available services include four progressive levels of optional, pre-defined workshops ranging from a one-day seminar to a seven-week program, with the opportunity for customized projects tailored to individual organization needs, including complete cloud lifecycle visibility and infrastructure cost data, infrastructure-as-a-service (IaaS) cost modeling, and pre- and post-migration infrastructure performance testing and IaaS validation. Workshops include:
  • Cloud 101 – a one-day that outlines cloud market trends and evaluates an organization’s IT environments. Customers learn the most compelling use cases for cloud and how centralized IT can manage control in a technology-as-a-service environment.
  • Cloud 201 – a one-week, in-depth look into the customer’s IT environment to help develop a cloud strategy, construct supporting business cases, and identify data center transformations necessary for cloud adoption. Customers produce a tailored and prioritized list of cloud-candidate applications and services, a high-level roadmap for cloud optimization, and an assessment of current cloud operations, infrastructure, and processes.
  • Cloud 202 – a three-week process that includes the Cloud 201 consultation and additional focus on total cost of ownership (TCO) frameworks to identify cloud vendors that match specific workload needs. It also provides an overview of cloud security and the compliance landscape with prospective vendors, plus an approach to data center cost reduction and key cost reduction drivers with cloud.
  • Cloud 301 – a seven-week process focused on the financial and non-financial benefits of cloud adoption. Customers derive a prioritized list of applications/services whose TCO, business, and security considerations indicate cloud is (or is not) the best IT delivery model, plus an assessment of their current data center cost breakdown vs. industry standards and a validated as-a-service cloud operating model.

Go to www.cdw.com/cloud for more information.

Resources: Electronic Health Records

Let’s make an EHR deal

The U.S. Department of Health and Human Services’ (HHS) Office of the National Coordinator for Health Information Technology (ONC) has released a practical, easy-to-understand resource to help healthcare providers get the most out of their health IT efforts when it comes to EHRs. The new contract guide, “EHR Contracts Untangled: Selecting Wisely, Negotiating Terms, and Understanding the Fine Print,” explains important concepts in EHR contracts and includes example contract language to help providers and health administrators in planning to acquire an EHR system and negotiating contract terms with vendors.

Download the guide at www.healthit.gov/sites/default/files/EHR_Contracts_Untangled.pdf

Tech Watch

Deloitte gets go-ahead for Cancer XPRIZE

Detecting cancer earlier for everyone, everywhere is the ultimate goal of Deloitte’s Conquering Cancer XPRIZE, a program that was green-lighted in October by XPRIZE, a nonprofit that shepherds the design and implementation of innovative competition models to solve grand challenges. A group of 250 prominent corporate and political leaders, entrepreneurs, philanthropists, artists, technologists, and scientists evaluated several proposals and eventually chose the Deloitte project at the XPRIZE Visioneers 2016 Summit.

Getting the go-ahead means that Deloitte can pursue a competition that incentivizes healthcare organizations, researchers, engineers, industries, inventors, and individuals to develop a working early-diagnosis screening tool – similar to a pregnancy test – to detect cancer. The Deloitte team’s standout project design feature is a Match.com-like platform that connects people and teams with wildly different experience, education, and technical acumen to come together to meet the challenge goal.

Current active XPRIZE competitions include the $30M Google Lunar XPRIZE, the $10M Qualcomm Tricorder XPRIZE, and the $5M IBM Watson AI XPRIZE. An official launch date for Deloitte’s Conquering Cancer XPRIZE has not been announced.

Resources: Coding

ICD-10: One year later

My, how time flies. On Oct. 1, 2015, the U.S. healthcare system transitioned to ICD-10, and most everyone survived unscathed. In one blog post, CMS Acting Administrator Andy Slavitt described the changeover as “the biggest event no one heard about.” Slavitt noted in another blog post that the transition succeeded because of unprecedented cooperation among providers, payers, clearinghouses, vendors, and the rest of the healthcare community.

But winning the battle doesn’t mean winning the war. Because there are still issues to be reconciled and progress to be made, CMS is offering a range of resources to help organizations keep up to date on the latest in coding information and updates. They include:

  • The “ICD-10 Next Steps for Providers Assessment & Maintenance Toolkit,” which is filled with tips on assessing your transition progress, identifying opportunities for improvement, maintaining the headway you’ve made, and keeping up to date on ICD-10.
  • “ICD-10 KPIs at a Glance,” a checklist to analyze your progress and identify and address issues with productivity, reimbursement, claims submission, and other processes.
  • The “Provider ICD-10 Resource Guide & Contact List,” a step-by-step resource to help you locate important contacts quickly.
  • The 2017 ICD-10-CM diagnosis code set and guidelines, with comprehensive information on the ICD-10-CM updates for FY 2017.
  • The 2017 ICD-10-PCS inpatient procedure code set and guidelines, with comprehensive information on the ICD-10-PCS updates for FY 2017.

All resources are available at cms.gov (start at www.cms.gov/medicare/Coding/ICD10/index.html)

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