Biopharma: Will MACRA Be in the Crosshairs

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HIT Perspectives Biopharma Insights – February 2017

Will MACRA Be in the Crosshairs for Repeal and Replacement?

By Brian Bamberger, Life Science Practice Lead

A lot of energy and angst is being expended, both inside and outside the Washington Beltway, about the future of the Affordable Care Act (ACA), the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and many other regulations.

So far, it looks as though groundwork is being laid to address the repeal and replacement of “Obamacare.” However, we’ve also been hearing that many across the health care community are hopeful MACRA will be in the crosshairs as well. While we caution that it’s too soon to tell, we believe congressional action affecting MACRA is unlikely. Any such action is apt to be placed on the back burner and would materialize slowly — if ever. Here’s why.

  • The fate of the ACA will occupy Congress, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) for most of 2017. That in itself will be a gigantic undertaking — almost to the exclusion of everything else. There’s only so much bandwidth to go around.
  • MACRA is a statute. MACRA and its two payment tracks for physicians participating in Medicare were passed with overwhelming bipartisan support in Congress. As a result, it is unlikely there will be much appetite to repeal or replace this law anytime soon. Besides, Congress and HHS will have bigger fish to fry in the near future with the planned repeal and replacement of the ACA, not to mention the activity that will ensue if rumored changes are brought forward for Medicaid and Medicare.
  • This brings us to speculation that CMS’ Center for Medicare and Medicaid Innovation (CMMI) will come under fire. Created by the ACA, the CMMI is charged with creating most of the alternative payment models that form the foundation of MACRA’s alternative payment model track. Even if the CMMI is changed or dismantled, policy experts believe that MACRA’s core provisions will remain.
  • Although there may be some delays in implementation, it is nonetheless inevitable, which would not be unusual. In fact, implementation slowdowns are bound to happen and are commonplace with large federal regulations. ICD-10 is the poster child for this scenario. For MACRA, policy makers are likely to respond to stakeholders’ vocal concerns over such issues as an aggressive implementation deadline and the gap between the time when data must be reported in 2017 and when they will actually be used in 2019 to compute physician payments. Additionally, the new administration may want to put its own stamp on some requirements, which could result in a good deal of tweaking down the road. It may, for example, want to simplify some of the statute’s complicated requirements. Again, that would not be unusual but is unlikely to result in a whole new law.
  • Frankly, the genie is out of the bottle regarding quality and pay-for-performance. MACRA represents the latest in a string of such requirements for Medicare and public payers. Providers who chafe at CMS’ plans to publish performance data from the Merit-Based Incentive Payment System payment track have short memories. CMS has been publishing provider data for years, such as on its Physician Compare website. Many of the new accountable care organizations — and large integrated delivery networks –— publish physician quality scores internally. We hear that some plan to make them available to the public as well. Quality reporting is the way of today’s world, which is increasingly focusing on value-based care and pay-for-performance. Making provider performance data available to the public is viewed as a way to bring better quality alignment for providers and reduce costs. It also could help inform physician hiring by hospitals and health systems.

While 2017 will be a year of change, providers should not sit back and wait to see what happens with MACRA. Over the years, we have watched providers sit on their hands, hoping against hope that statutory and regulatory changes will be made, and then playing a costly game of catch up. The MACRA clock started ticking January 1, 2017. Decisions about contracts, risk management, hiring and infrastructure will need to be made soon — and they could have far-reaching implications for the future.