Most physician practices are running a race against time to implement Medicare's value-based payment system, survey data indicates. They have a lot to think about as they go about it.
As Medicare's reviled Sustainable Growth Rate (SGR) formula for physician reimbursement fades to extinction, its replacement, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, is posing a new set of challenges.
This week Black Book Research identified 10 of the top MACRA challenges that physician practices are facing. The survey is based on responses from 8,845 physician practices collected from February to April.
1. MIPS compliance technology: Physician practices are seeking technological solutions to help them achieve reporting compliance, with 77% of practices that have at least three clinicians mulling the purchase of Merit-Based Incentive Payment System Compliance Technology Solutions (MIPS) software.
2. Electronic Health Record (EHR) optimization: MACRA appears to be a golden opportunity for the largest EHR vendors. For the top eight EHR companies, 83% of their physician-practice users reported working to upgrade their system for MIPS compliance. At physician practices with smaller EHR vendor partners, however, 72% reported they were not working with their vendor partner to upgrade their system for MIPS compliance.
3. Consultant opportunity: The EHR capabilities required for participation in MIPS or Alternative Payment Models (APMs) represent a business opportunity for EHR consultants. Most (80%) of physician practices report that conducting a technology inventory is key to strategic planning for a value-based payment system.
4. Data wrangling: Taming data to conform with the reporting requirements of MIPS and APMs is daunting for many physician practices. At practices with at least four clinicians, 81% of physicians report being unable to align their data with the new reporting requirements.
5. Paying for procrastination: Physician practices that have not developed an in-house strategy for participating in MIPS or an APM are looking for outsourcing options. Of these practice procrastinators, 80% are planning to find turnkey software or a MACRA-administration partner this year.
6. MACRA-induced physician-practice consolidation: Black Book found that three-quarters of independent physician practices surveyed are considering selling their practice to a health system, hospital, or large group practice because of the regulatory and capital-cost burdens of MACRA.
In an equally dour data point, 68% of independent physicians predicted that MACRA would either burden or bankrupt their practice by 2020.
7. Economic incentives: For the first five years of the Quality Payment Program, there are powerful economic incentives to beat the MIPS performance threshold.
In 2019, MIPS is set to redistribute about $199 million from physicians who perform below the performance threshold to physicians above the threshold, and this redistribution mechanism is set to expand over time.
There also is $500 million in supplemental funding available for each of the first five years of MIPS implementation. To chase these opportunities, 64% of hospital-networked physician organizations reported including incentives in physician-compensation packages to boost MIPS performance.
8. Reputation risk: A majority (54%) of those surveyed did not know that MACRA would result in performance data being reported publicly through Medicare's Physician Compare website and other rating systems.
9. ACO appeal: Joining an accountable care organization can increase the odds of MIPS success through penalty avoidance and resource utilization bonuses. Small physician practices have taken notice, with 67% considering joining an ACO to increase the likelihood of MIPS success.
10. Cost and quality transparency: Based on its physician-practice survey and other research, Black Book Research expects MACRA to be one of the market factors driving healthcare cost and quality transparency.
One survey noted 52% of large group practices, independent practice associations, ACOs, and integrated delivery networks reported they were preparing to release cost and quality measures for individual physicians by next year.
Christopher Cheney is the CMO editor at HealthLeaders.