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October 11, 2016 News No Comments

Readying the Revenue Cycle for MACRA
By Cherie Holmes-Henry and Charles Kaplan


In the future, people will look back on January 2017 as a turning point in physician payment thanks to MACRA. Once the law is in effect, physician practices will no longer receive defined Medicare payments for services rendered, but instead will earn income based on quality outcomes and costs of care.

Although there has been a good deal of discussion around what the MACRA legislation means for practices regarding quality reporting and cost reduction, there hasn’t been as much discussion about what effects it will have on the revenue cycle. This is because industry experts are still unclear about what the short- and long-term ramifications will be. Will providers submit Medicare claims for quality-based payments? What will those look like? Will multiple providers be included on the same claim? How quickly will changes occur? Will commercial payers shift to this model? If so, when?

From all indications, it seems that MACRA will substantially advance the move to quality-based payment and performance; however, a complete transition will not happen right away. Organizations will have to live in both the fee-for-service and value-based reimbursement worlds for some time. The current fee-for-service reimbursement model is relatively objective — an organization performs a service, delivers a treatment or uses a supply, and it bills and receives payment for these items. Fundamentally, it’s a widget-driven system. With value-based care, on the other hand, reimbursement becomes more subjective, with increased investment in the patient at the center of it all. Payment is tied to outcomes, but what defines a good patient outcome? In large part, that depends on the measures a physician practice reports and how the organization’s performance compares with its peers.

Rising Above the Unknown

Despite the current uncertainties surrounding MACRA, there are a few positive steps physician practices can take now to prepare their revenue cycle for the coming change.

Get familiar with the law. According to a July 2016 study by Deloitte, more than 50 percent of US physicians don’t know what MACRA is, much less how it will apply to them. A first step is to get acquainted with the legislation’s content. Although this may seem like a tall order, there are some good resources that succinctly explain what the law entails, its overall purpose, and what that means for physician practices. MGMA, for example, has an entire microsite devoted to the topic. Similarly, several industry leaders have developed purely educational tools to guide physicians through the regulation. For example, AMA just released several online resources including a Payment Model Evaluator tool and MACRA-focused podcasts to assist physicians with the transition.

Know your data. For now, MACRA specifically applies to Medicare reimbursement. To gauge the potential impact that the ruling might have, physician practices should determine exactly what percentage of their patients are tied to which payers. If only 25 percent of a practice’s reimbursement comes from Medicare, for instance, MACRA may not cause too much upheaval — at least not right away. However, if 75 percent of revenue comes from Medicare, the legislation stands to have a transformative effect. By getting a sense of the revenue role MACRA will play, practices can plan accordingly.

Revisit and retool coding. Whether an organization receives quality-based reimbursement, fee-for-service, or some combination of both, a precise understanding of the care, treatment and services it provides, as well as the acuity of its patients, is essential. Physician practices should review their current documentation and coding processes and make sure they are capable of accurately and completely reflecting the care episode.

This is an especially good time to take another look at these activities because, as of October 1, 2016, CMS added 1,900 new ICD-10 diagnosis codes that physician practices must start using. Additionally, this marked the end of the “grace period” that organizations had to fully transition to and practice coding under ICD-10. Revenue cycle processes will have to build intelligence for these factors in order to adapt to changing payment models. Providers should make sure they are correctly and consistently applying these codes, and that they adequately reflect the organization’s current reality.

Evaluate reporting capabilities. A key element in complying with MACRA is reporting quality information correctly and in a timely fashion. Physician practices that have participated in Meaningful Use and the Physician Quality Reporting System are already familiar with this idea. However, those that are new to reporting — or that have struggled with it in the past — should invest in upgrading the process. This may involve rethinking current procedures and technology, as well as addressing the culture of improvement. Organizations must be committed to interpreting and responding to these reports, intervening when performance falls below targets.

Not as Easy as 1-2-3

Given the amount of uncertainties that are still present, there is not an obvious, three-step process to readying the revenue cycle for MACRA. That said, those physicians who adequately prepare by assessing the existing state of their practice, analyzing and embracing areas of strength, and focusing on improving certain functions such as coding and reporting will find more success — no matter how the law unfolds.

Cherie Holmes-Henry is vice president of business development-industry affairs and Charles Kaplan is general manager for RCM services at NextGen Healthcare in Horsham, PA.  


JennMr. H, Lorre, Dr. Jayne, Dr. Gregg

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