6 Things Medical Manufacturers & Distributors Need to Know About MACRA

There are a lot of questions whirling around about MACRA and the new Quality Payment Program (QPP) for physician reimbursement by Medicare. Here is a down-and-dirty list of six things that upper level management members of medical manufacturers and distributors need to know.

First - MACRA affects how physicians and other eligible clinicians are paid on the Medicare Physician Fee Schedule (PFS). It does NOT affect how hospitals and other healthcare facilities are paid by CMS for in-patient care. It will affect how hospitals pay their employed practitioners.

Second - The reimbursement changes under MACRA’s payment program will become effective with the 2019 payment schedule, but will be based on the eligible clinicians performance during 2017 - the performance year.

Third - MACRA was implemented in 2015 and stands for the Medicare Access and CHIP Reauthorization Act of 2015 to replace the flawed Sustainable Growth Rate (SGR) model for physician reimbursement. The SGR necessitated annual “doc fix” legislation by congress to keep from creating a negative impact on eligible provider (EP) reimbursement.

Fourth - According to this Deloitte survey last year, half of physicians do not know what MACRA or the QPP entails. So there is a great opportunity for your sales reps to be a valued source of information for their physician customers. They can look at this previous blog for specific info that they can use.

Fifth - MACRA is focused on promoting the value over the volume of care provided and includes two pathways for achievement. The first pathway is the MIPS (Merit-based Incentive Payment System), which most physicians will use; and which effectively replaces the EHR Meaningful Use, the Physician Quality Reporting System and the Value-based Payment Modifier programs, plus adds an Improvement Activity program to track how effective practices are at focusing more on quality instead of quantity of care.

The second pathway is the Advanced Alternative Payment Model (APM) which requires the physician practice to participate in a risk-sharing program and is specific to a few specific categories of patients.

Sixth - The QPP portion of MACRA involves both positive and negative financial incentives to the clinician based on their level of participation. Non-participation will incur a -4% impact on their Medicare reimbursement in 2019 and increase to a -9% in 2022. Similarly, with appropriate levels of participation, the practice could achieve a +4% increase in Medicare reimbursement in 2019, going up to a maximum of +9% in 2022. By the way, this is supposed to be a budget neutral program, so required performance levels will be increasing as time goes on to avoid those dreaded negative payment adjustments.

Summary

Here are the key take-aways:

1. MACRA relates to how clinicians are paid by Medicare, NOT how hospitals are reimbursed.
2. The payment adjustments will begin in 2019 and be based on participation levels and performance in 2017.
3. It replaces the SGR.
4. A lot of clinicians are still unfamiliar with what it means to their practice.
5. It is another movement toward payment based on documentable improved quality of care as opposed to increased quantity of services provided.
6. The payment adjustments will be from -4% for non-participation up to +4% for optimal participation in the MIPS program and +5% for those in the Advanced APMs. These payment adjustments will increase to a +/- 9% by 2022.

What does this mean to you?  

• Focus on providing ways in which your clinician customers can acquire quality products and services in a cost effective manner. Bundling may be an option.
• Work with you clinician customers to develop plans for improving the quality of care being provided over the next 3, 4, 5 years or more. Maybe spread purchases out over multiple years so that they can show improvement.
• Make sure your reps are up to date on all the pain points that your customers are experiencing.

And most important

• Engage an inbound marketing team to make sure potential customers can find you online.