What Level of MACRA Investment Makes Sense for Rural Hospitals?

Rural hospitals have some tough decisions to make about their level of participation in the new CMS Quality Payment Program created by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). 

For a number of reasons, the MACRA cards are stacked against small and rural providers. Given the limited number of Advanced Alternative Payment Models (APMs) that are being approved, many providers will start out in the Merit-Based Incentive Payment System (MIPS), and that track offers limited upside potential compared with APMs.

At the same time, the infrastructure investment that will be required to maximize MIPS incentives would stretch the capital resources of many rural providers, which often have fewer employed physicians to share the burden. In the short term, those costs might seem to outweigh the benefits.

But remember that decisions about participation in payment model reforms should always be made with an eye on long-term strategy. In a recent article about what rural hospitals need to know about MACRA, the chief transformation officer of the National Rural Accountable Care Consortium, said, “It’s not about the payment model. It’s about implementing population health.”

So while the road might be more arduous for rural and smaller hospitals, long-term success is still within reach. That success requires thoughtful cost-benefit analysis, including the following components:

  • Current-state assessment. First, assess where your practice stands today and what capabilities it has at its disposal. Do you have the technology and processes necessary to report on the required MIPS measures? Do you know which clinicians are MIPS eligible providers? This initial assessment should identify gaps in the organization’s readiness to report on the MIPS measures. 
    • What-if scenarios. Next, model all of the potential scenarios and resources required. What level of investment would be required to achieve success in each scenario? Hospitals and practices that have not already implemented an EHR will need to weigh the price tag of a new system against the anticipated net positive impact of the incentive program. The cost of the software itself is only the tip of the iceberg. Analytic capabilities will need to be developed to capture data on new measures, especially in the new category of Clinical Practice Improvement.
    • Conduct a market scan. Look beyond Medicare and keep a finger on the pulse of payment model reform in your market. State Medicaid programs and many commercial payers are considering their own outcomes-based reimbursement systems. Investments in EHR and other infrastructure may become more attractive when considered within the context of the overall move toward population health management.

For most rural providers, this strategic analysis will highlight gaps that they do not have the resources to close on their own. As the reporting burden increases and access to capital continues to be a challenge, more rural and smaller providers are looking to affiliations to bridge those gaps. Whether it is an affiliation with a clinically integrated network (CIN) or a formal acquisition by a larger health system, providers need to find ways to access the necessary infrastructure to capture and report on the required measures while also providing and coordinating care in a way that drives quality and cost improvements.

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Topics: Quality Payment Program, MACRA Summary

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