MACRA’s Money Effects Depend on Providers, Study Finds

MACRA and its shift to a value-based payment model has people in the business of healthcare talking. While most of us may be thinking about the MIPS (Merit-Based Incentive Payment System) track for the Quality Payment Program, there is another option: Alternative Payment Models (APMs). An APM offers incentive payments for high quality, cost-efficient care.

Will Physician or Hospital Payment See Bigger Changes?

A team from RAND Corporation looked into the effects of APMs by using the RAND Health Care Payment and Delivery Simulation Model (PADSIM), which provides a framework for seeing how providers act in response to payment policy changes.

Here are a couple of the key findings reported in the research brief:

  • Medicare spending on physician services will be lower under MACRA. The RAND team estimates a drop somewhere between $35 billion and $106 billion.
  • There’s a wide range of possibilities when it comes to hospital payment changes. They could see an increase of $32 billion or a decrease of $250 billion.

Whether payment incentives drive changes in physician behavior will be a major factor in which direction hospital payment goes. The RAND research brief lists the examples of “working to avoid hospital readmissions or reducing use of hospital care,” and also states that having well-designed APMs is an important factor in encouraging participation.

From a financial perspective, the research indicates healthcare business models will need an update to be based around value.

Where to Learn More About APMs

You can see a list of Advanced APMs on the CMS APM site. Examples include Comprehensive Primary Care Plus (CPC+), Next Generation ACO Model, and Oncology Care Model (OCM).

To get a better idea of what CMS wants to see in an APM model, check out the Alternative Payment Model Design Toolkit.

You have to submit the quality data your Advanced APM requires, but meeting participation requirements in 2017 brings a 5 percent incentive payment in 2019. The CMS site indicates you must receive a quarter of your Part B payments through the Advanced APM or see 20 percent of your Medicare patients through the Advanced APM.

What About You?

Will you be using the APM track? What have you learned?





Deborah works on a wide range of TCI SuperCoder projects, researching and writing about coding, as well as assisting with data updates and tool development for our online coding solutions. Since joining TCI in 2004, she’s covered the ins and outs of coding for radiology, cardiology, oncology and hematology, orthopedics, audiology, and more.

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