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Bundled Payments: How Physicians Prepare For MACRA

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Coordinating care with hospitals and other healthcare providers is already a reality for many independent primary care physicians, but not every doctor is doing everything they can to maximize outcomes for patients. In order to do this, physicians need to fully understand the bundled payment process. A better understanding of bundled payments may increase reimbursements, according to the Medicare Access and CHIP Reauthorization Act (MACRA).

What Are Bundled Payments?

A bundled payment is when a payer, such as the Centers for Medicare and Medicaid Services, sends a lump sum of money for all the services related to a single episode of care for a patient. This payment can cover everything from an initial hospital visit to outpatient care in the home. The size of a bundled payment from CMS depends on the historical data for the type of episode. For example, the same amount of money is paid every time a senior breaks their hip. 

If care providers can achieve positive results while staying under the predetermined bundled payment amount, they can pocket the difference. For physicians, savings can be realized through gainsharing agreements with hospitals. In the broken hip example, the physician provides follow up appointments with the patient after surgery to ensure a positive recovery. Once the hospital gets their bundled payment from CMS, they'll pass on any savings they realized from the arrangement to the doctor. 

How MACRA Changes Things

Congress passed MACRA legislation in late 2016 with the goal of overhauling federal health spending, including penalties or bonuses tied to outcomes. The legislation was deemed necessary because physicians were expected to suffer financially from reduced payment adjustments from programs like Sustainable Growth Rate and Meaningful Use. Under MACRA, penalties are drastically reduced and physicians are incentivized to benefit from Alternative Payment Models (APMs). QPP, the Quality Payment Program, promotes the use of APMs in order to:

  • Improve patient outcomes
  • Decrease provider burden
  • Preserve the independence of clinicians

Physicians now have the first real opportunity to take advantage of these new programs by participating in the Merit-Based Incentive Payment System (MIPS). MIPS is designed to be as flexible as possible, so the government will provide technical assistance to small practices. As of 2017, physicians have four participation options: sit out and suffer a 4 percent penalty, send in a single piece of data and avoid a downward payment adjustment, 90-day participation, and full participation.

Steps to Prepare for MACRA

Physicians who aren't sure how to start adapting to the changes taking place under MACRA legislation in the upcoming years can use the following five steps as a guide:

  1. Use AMA’s payment model evaluator to see they qualify for MIPS, Advanced APM tracks, or exemption status. Also find out if they should report as an individual or group, and if they meet requirements for rural, small, or non-patient-facing physician accommodations.
  2. Target specific areas for improvement by going over PQRS reports from previous years. This might be difficult if a practice hasn't reported data in the past. 
  3. Start participating in a data registry to improve reporting and performance when working with MIPS. Physicians can gain access to registries by contacting their specialty societies. 
  4. Feedback reports will start coming out in the summer of 2017, making this year the perfect opportunity to start testing systems to see how practices will be affected by bonuses or penalties. 
  5. Choose one of the following reporting methods: claims, EHR system, qualified clinical data registry (QCDR), clinical registry, or GPRO Web Interface for larger practices. The time to start reporting is now.