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Could MACRA Be Key to Fixing Healthcare?

Analysis  |  By Gregory A. Freeman  
   August 09, 2017

A system that encourages shared savings and shared risk between health plans and providers could address many of the Affordable Care Act's problems. Health plans are likely to move away from fee-for-service payments to a managed care approach, one analyst says.

The government could be sitting on a solution to the healthcare debate and not even realize it, suggests one analyst. The act that finally fixed a problem threatening to bankrupt physicians every year could show the way to fixing the Affordable Care Act, he says.

The Medicare Access and CHIP Reauthorization Act (MACRA) may provide a roadmap and policy vehicle to address questions of quality, cost, accessibility, says Bruce A. Johnson, JD, a shareholder with the Polsinelli law firm in Denver, CO.

Related: MACRA 2018 Proposed Rule Reflects New CMS Flexibility

MACRA is based on the idea of shared risk and shared savings, and Johnson says the same theory could be applied to the ACA. Health plans are already moving in that direction, without waiting for the government to lead, he says.

Known as the "doc fix," MACRA is a recent bi-partisan legislative action that eliminated a nearly 20-year-old problem with how Medicare set payments to physicians. Congress passed the act in 2015 to put an end to an annual drama in which physicians faced huge Medicare pay cuts, 21% that year, if legislators didn't take emergency measures to stop it for another year.

By fixing the problem, MACRA eliminated substantial uncertainty about the stability of Medicare related to physicians leaving the program because they couldn't make enough money – similar to how profitability issues have driven health plans out of the state exchanges.

Related: MACRA - Easing Physician-Practice Pain Points

MACRA introduced performance-based reimbursement by rewarding practices that participate in alternative payment models (APMs) such as accountable care organizations (ACOs), and through a merit-based incentive payment system (MIPS).

The first couple of years focused specifically on Medicare-only programs, but then in future years some of the MACRA models include consideration of commercial populations, he notes.

A health system with a Medicare-only population may not meet the MACRA requirements for and APM and the associated rewards, but MACRA could allow them to create relationships with commercial payers, he says.

"As they bundle together more people receiving similar types of care, combining Medicare, Medicaid and commercial, the organizations may be able to qualify as an APM," he says.

That would benefit the health system financially but also health plans, Johnson says. By working with providers to reduce costs and improve outcomes, they could conceivably share in the savings offered by a MACRA-style arrangement.

"Health plans are incrementally trying to move toward different forms of shared savings programs and some level of risk for providers. We're seeing United and the Blues doing some of that, and clearly Medicare Advantage plans are in one way or another willing to have providers take risks through capitation or basically managed care," Johnson says.

"That is probably a long term strategy. The timeline MACRA has laid out for implementation may be too aggressive because I don't think the health plans have plan types and resources to change that fast, but I think the trajectory is going to be a move from fee-for-service to shared financial risk over time."

Gregory A. Freeman is a contributing writer for HealthLeaders.

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