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In the News: June 15–21

Sg2 is dedicated to helping our clients interpret the latest news and trends in health care. Below you’ll find our analysis of this week’s key industry headlines, along with links to related Sg2 resources.

MACRA 2018 Proposed Rule Is Here!

On June 20, CMS released the 2018 proposed rule for the Quality Payment Program for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Under this program, clinician’s Medicare Part B payments are tied to value under the Merit-based Incentive Payment System (MIPS) or through advanced Alternative Payment Models (aAPMs). The following are some of the key proposed changes:

  • Expand the low-volume threshold. Medicare Part B minimum revenue threshold is tripled from $30,000 to $90,000. The Medicare patient count threshold is doubled from 100 to 200 patients.
  • Increase maximum negative MIPS adjustment to negative 5% from 4%. This is a required change under MACRA and will increase to 7% in the third program year and 9% from the fourth program year. Payment adjustments apply 2 years after the performance year (ie, 2018 performance determines 2020 payment adjustment).
  • Adjust MIPS scoring thresholds. To avoid negative payment adjustments, clinicians must earn a total score of 15 points (out of 100), which is an increase from 2017 requirements of 3 points. The threshold to qualify for additional positive adjustments from the $500 million “high performance” pool remains the same at 70 points.
  • Extend MIPS performance category weighting from 2017. The cost performance category would continue to be weighted at 0%, rather than a scheduled increase to 10%. Under MACRA, cost and quality performance categories will be weighted equally at 30% from the third program year (2019 performance year).
  • Update aAPM criteria, projecting that aAPM participation will grow rapidly. Based on preliminary data, CMS estimates that 74,920 clinicians will qualify for aAPM incentives (ie, exclusion from MIPS and a 5% lump sum bonus payment) in 2017. 2018 projections range from 180,000 to 245,000 clinicians qualifying for aAPM incentives. The rapid growth is partially attributed to additional opportunities for clinicians through the reopening of Comprehensive Primary Care Plus and Next Generation Accountable Care Organization (ACO) for 2018, as well as the start of the ACO Track 1+ and Episode Payment Models.

Through the proposed changes, CMS continues to pull multiple levers to ease the transition to a value-based payment system under MACRA. Without legislative changes, however, these levers (eg, re-weighting the cost performance category) will not be available from 2019. Sg2’s health care policy and payment experts advise strategy leaders to focus on integrating MACRA strategy and execution into broader strategic initiatives (eg, physician alignment, clinically integrated networks and payer strategies). Contact your Sg2 account manager to connect with a MACRA expert to discuss how other health systems are preparing to do this.

Finally, Sg2 will continue to track the evolution of MIPS and aAPMs. Sg2 members who want to understand MIPS, aAPMs and MACRA can review the Sg2 special report: MACRA: Answers, Impact and Strategic Imperatives, as well as access the multitude of resources available in the Sg2 MACRA Resource Kit.


The Replication of Effective Complex Care Management Models Is Examined

A recent Health Affairs article explores the approaches to and challenges of replicating effective models of complex care management for older adults with multiple chronic conditions. In 2014, more than 15% of Medicare fee-for-service (FFS) beneficiaries had 6 or more reported chronic conditions, accounting for 51% of Medicare FFS spending ($126.1 billion). The article recommends 2 complementary approaches to replicating effective models: strengthening the design and implementation of scalable models and using innovative methods to improve the replication and spread of models already proven to be effective.

Sg2 believes successful health systems should structure their chronic care programs around chronicity rather than a specific chronic disease. These programs may target particular challenges associated with chronic disease, such as food insecurity, health literacy or the inability to pay for medication. For Sg2 expertise on developing a chronic care strategy, read the Sg2 report: Developing a Market-Driven Chronic Care Strategy.


Nevada Forces Drugmakers to Reveal Insulin Pricing and Profits

New Nevada legislation requires drugmakers to disclose prescription drug prices, profits and discounts they provide to market middlemen for insulin, which is one of the many life-sustaining medications with price increases over the past decade. The rule will take effect in spring 2018, and manufacturers will face daily fines of $5,000 if they fail to comply. Supporters view the bill as a way to equip patients with data they need to combat unfair price hikes, but it is unclear whether opponents will comply or contest the rules in court.

Drug prices are one of the top pharmaceutical trends on the minds of health care leaders. Sg2 has developed insights to help providers prepare for potential changes in drug costs and new pricing models. To learn more, check out the Sg2 Expert Insight: Pharmaceutical Trends: 5 Areas Health Care Leaders Should Be Asking About.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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