Featured in Health Business Daily, July 5, 2017

Despite Protests, MA Plans Must Wait for MACRA Payment Status

Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry. Subscribe today!

November 14, 2016Volume 26Issue 40

Now that HHS has issued a final rule (81 Fed. Reg. 77008) implementing the Medicare Access and CHIP Reauthorization Act (MACRA) starting on Jan. 1, 2017, the health insurance industry remains upset that CMS excluded Medicare Advantage (MA) plans from possibly qualifying for the program’s Quality Payment Program until 2021.

In the rule released on Oct. 14 (HPW 10/24/16, p. 8), CMS said at first the new value-based bonus system would be based on traditional Medicare, not MA. To qualify under the advanced Alternative Payment Model (APM), MA plans will have to wait and be considered for inclusion under the All-Payer Combination Option.

MACRA, which replaces the Sustainable Growth Rate formula, is meant to modernize and streamline physician payments under a new quality-based system. The rule spells out the two paths physicians can take to participate, with the first involving performance measured by the Merit-based Incentive Payment System (MIPS), and the second limited to physicians who participate in advanced APMs and get a 5% bonus on Part B revenues.

Health Plan Week

2019 Looms as Key Year

Starting on Jan. 1, 2017, physicians’ and other providers’ performance will determine their future payment rate updates. Because of the time required to gather and evaluate performance data, spending and other performance measures reported for calendar year 2017 will provide the basis for payments in 2019. For vendors active in the health insurance space, MACRA has brought opportunities to offer carriers new tools to manage APMs (HPW 8/1/16, p. 1).

The insurance industry argues that MA plans, since they are receiving capitated payments, should be part of the first-batch 2019 APMs considering the risk they are taking. CMS, however, wants a different kind of model to start, according to Anne Phelps, principal and U.S. health care regulatory leader for Deloitte LLP.

“As for the MA classification, under MACRA in order to be what they call an advanced APM the incentives have to be aligned to move practitioners into these arrangements, and you have to do three things: bear downside risk, not upside risk; second is to have to apply the new performance measures (MIPS) to practitioners; and you also need certified electronic health records,” she tells HPW. “That is why the list of advanced APMs is limited since very few models have downside risk in them. But over time they will expand.”

When the list of APMs grows after the first two years of the program, then MA plans can apply for status under the All-Payer Combination Option or another payment model. “If you can show that you are applying the three principles to these other payers, like Medicaid or MA or the commercial market, then you can draw down higher Medicare dollars,” Phelps says. “Some plans and leading providers with a lot of MA business, they would like to see CMS say, ‘well, you know MA right now is an advanced model because it is capitated.’ But it is capitated at the plan level and CMS is hesitant. We will have to see maybe what Congress says because MA does not meet the criteria of MACRA since capitation cannot be just at the plan level but at the practitioner level. They are sharing in the risk.”

She says it is important to note that MACRA is going to have different iterations within the regulatory process and a number of annual updates and changes that will occur as well. Another area of interest is that there could be some similarities between MA stars quality performance program measures and MIPS performance measures in MACRA. MIPS administers bonuses or penalties based on how well physicians perform relative to other physicians on a complicated set of quality and value measures.

As for the law’s survival under a Trump administration, Phelps says the overwhelming bipartisan support MACRA received will likely keep it protected, but there are always opportunities for tweaks by CMS and Congress, including on the MA issue. “Many people feel MA is a coordinated care risk-bearing arrangement, so I think it will be looked at more closely over the next year or so….This is a dynamic process,” she adds.

Humana Promotes MA Model

Separate from the MACRA argument, but tied to the issue of MA and value-based payment models, Humana Inc. on Nov. 2 said for the third straight year it has seen better health status, improved quality of care and lower costs from its efforts. “For the calendar year 2015 results, Humana compared quality metrics and outcomes for approximately 1.2 million MA members who were affiliated with providers in value-based reimbursement model agreements to 170,000 members who were affiliated with providers under standard MA settings,” the insurer said.

The key findings from this comparison include that providers in the value-based arrangements had 19% higher Healthcare Effectiveness Data and Information Set (HEDIS) scores; the value-based members also saw 6% fewer emergency department visits and Humana experienced 20% lower costs for these MA members.

As of Sept. 30, Humana said around 63% of its individual MA members are seeing providers who are in value-based payment arrangements.

Read the rule at http://tinyurl.com/zxuhpna.

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