What MACRA Means for Health Plans

Blog /What MACRA Means for Health Plans

By now, the term MACRA has been heard by most in the healthcare field. However, studies show that most providers are still not familiar with the requirements or how this 2015 federal legislation is going to affect them; health plans may also have questions or concerns.

The majority of publications that I have read have focused on the providers and health systems, but what about health plans? What is the potential impact to the health plan industry now that the first performance year for MACRA is underway?

As with any new legislation or administrative rulemaking, there are both potential benefits and potential concerns with MACRA. Let’s take a look at some of the key topics for health plans I have found amongst the plethora of available MACRA documentation.

One point on which all the analysts agree: collaboration is key. MACRA provides multiple opportunities for health plans to increase and/or improve collaboration with their provider networks. Recommendations on how health plans can accomplish this are:

  • Offer to assist providers and health systems with meeting MACRA requirements, whether it be under the MIPS or the APM pathways. How?

    • Enter into agreements with provider networks to supply support/services in areas where they may not have as much expertise (e.g., advanced analytics/data science).

    • Provide input and support to providers on the clinical measures that would be most beneficial for them to monitor and report, based on predictive models and analytics most health plans use but which are not readily available in the provider environment. This becomes a win-win scenario, as many of the clinical measures for MACRA are the same or very similar to the measures health plans need to report under Stars/HEDIS.

  • Share more advanced technical infrastructures to facilitate data exchange and enable providers to access a full 360-degree picture of a member/patient. This will lead to “opportunities to offer tailored consulting and data support" that can improve performance for the health plan’s provider network.

  • Help providers educate their patients (your members) on the costs of care and their healthcare options. As the number of high-deductible plans increases, there is a rising need for open and effective communication and feedback loops between all parties in the healthcare continuum.

  • Partner with the provider network. Providers will be seeking strong partners with the necessary skills, experience and knowledge to ensure they do not take on risk greater than they can support. Health plans should actively strive to be strong partners through:

    • Enabling robust data analytics that support quantitative action plans in the areas of quality and clinical care gaps, medical cost and trend analysis, population health, and member risk management.

    • Staying flexible.  Be ready to address changes to provider payments as the pay-for-performance model(s) mature over time.

    • Entering into risk-sharing relationships (e.g., value-based contracts) with high-performing providers. (To learn how to identify such providers, read my previous blog, Identifying High-value Primary Care Teams through Analytics.)

  • Be aware of the financial considerations that result from increased value-based contracting. The first of these is the potential for increased costs. Smaller providers are more likely to experience hardships under MACRA, which may result in additional provider consolidation. As Medicare payments shrink, these providers will be looking to shift costs to other payers, making contract negotiations more difficult and potentially increasing unit costs for some services. Large physician groups or those located in markets with progressive healthcare systems will look to negotiate even higher reimbursement rates due to the potential for increased competition. Some physician offices may become reclassified as hospital outpatient departments as a result of integration with a hospital or other care delivery network. Services rendered by providers in these locations could result in facility fees as well as increased professional costs to the health plan.

Health plans should also be aware of potential impacts beyond Medicare fee-for-service (FFS), which is the initial focus of the MACRA legislation. During a round table discussion held in June 2016, participants identified the following items as having potential for broad impact:

  • Pay-for-performance is likely to extend beyond Medicare FFS into other health plan lines of business, such as Medicaid or commercial plans. Some health plans are proactively engaging in risk-sharing contracts in their other lines of business.

  • Health plans will need to build brand loyalty amongst their younger members as well as those with lower-risk (regardless of age) by demonstrating quality results for this population. Being able to view members holistically, with an eye toward the long-term, will be critical to support brand loyalty.

  • Ensuring access to healthcare services while attempting to work with highly rated providers, and thus a narrower network, will create a delicate balancing act for health plans to manage.

As you can see, there are many reasons why health plans should be aware of MACRA and how it will impact them. Increasing collaboration with their provider networks is likely to be beneficial to both parties, helping to hold down healthcare costs and improve outcomes for the member/patient populations.


Post Date: 4/4/2017

Karen A. Way, NTT DATA Services Karen A Way Health Plan Analytics & Consulting Practice Lead

About the author

Karen has extensive experience in the healthcare market, from both a business operations and information technology perspective. She has built and led successful, effective teams that deliver best in class solutions to improve client satisfaction, organizational cost savings, and workplace productivity. Her experience includes Advanced Analytics, Total Population Health, and Disease Management. Also, Karen has experience in the public sector regarding Medicare and Medicaid programs, including policy development and compliance.

As part of the Health Plan Innovation and Consulting team at NTT DATA, Karen is responsible for working with and supporting clients with ongoing health care reform activities so that they remain competitive in the evolving marketplace. While primarily a subject matter expert (SME) for BI and Analytics, Karen is also well versed in quality improvement initiatives (e.g., STARS, HEDIS), care management and Total Population Health. Her goal is to utilize her knowledge of the healthcare and IT/data management industries to leverage improvement in the member/patient experience and increase the value of current and future client offerings.