MACRA, the Medicare Access & CHIP Reauthorization Act, and its related payment system is set to impact hospital revenues in 2017 as the meaningful use modifier kicks in another three percent on the penalty side. There are both incentive payments and also penalties in the Act’s execution plan (known as MIPS) — a carrot and stick approach. The end goal is a shift toward being rewarded for the value of care, and the transition will reward some hospitals and penalize others that aren’t on board. The same applies to clinics, physicians practices, and other providers. We reviewed content from industry thought leaders to help you get a handle on MACRA, MIPS, and how it can help or hurt your hospital revenue cycle.

MACRA, MIPS and Provider's Revenue Cycle

Revenue Cycle Managers need to be more on the ball to win incentives and avoid penalties under MACRA this year.

The American Hospital Association (AHA) gives an overview statement on the impact of MACRA on their MACRA resources page that observes, “Implementation will impact physicians and the hospitals and health systems with whom they partner.  Hospitals that employ physicians will help defray the cost from implementation of and ongoing compliance with the new reporting requirements, as well as be at risk for any payment adjustments.” The same group has prepared a PDF chart showing the impact range for 2017 varies from a high of +0.5% to a penalty of -.09%.  Although the MIPS reward system focuses primarily on physician’s performance, a post from the Numerof and Associates blog notes that, “hospitals and health systems will also be impacted by MACRA legislation. Particularly for hospitals with a large cohort of employed physicians, cuts to Medicare Part B reimbursement will have a direct impact on the bottom line.”

“While many providers may be tempted to slide by on the bare minimum in 2017, financial incentives will be there for the taking for those who choose to participate fully in MIPS.” — from Becker’s Hospital CFO


The incentive system under MACRA is called MIPS — short for Merit-Based Incentive Payment System. MIPS reviews providers based on four performance categories: quality, advancing care information, clinical practice improvement, and resource use. Scored measurements from each of the four categories are then weighted and used to calculate each provider’s composite performance score.

An article at Becker’s Hospital Review sums up MACRA’s goal like this:

“This complicated piece of legislation, which modifies the physician reimbursement schedule issued by Medicare, aims to drive the healthcare industry toward better care, smarter spending, and healthier people with its key provisions. Ultimately, the goal of MACRA is to shift healthcare delivery in the United States from a fee-for-service model to one based on the concept of fee-for-value.”

MIPS Solution Tips for Revenue Cycle Managers

Becker’s Hospital Review gave four top level MACRA-MIPS considerations for revenue cycle managers:

  1. Evaluate your electronic health records technology
  2. Choose compatible IT vendors
  3. Participate in a patient clinical data registry
  4. Understand your current quality measurements

Those four steps are important because a recent survey by HealthCatalyst (released Feb. 2017) shows that health systems are reporting that only about one-third of physician’s are ready for MACRA.  According to the survey overview, when asked which MACRA-related activities “pose the greatest difficulties for healthcare organizations,” 74 out of the 187 respondents (40 percent) ranked “compiling metrics for regulatory reporting” as the biggest challenge. The next biggest headache identified by survey respondents—18 percent—was the problem of “adjusting to greater coordination between providers and patients.”  To get a visual picture from the survey, see this infographic.

One way to get on top of MIPS related revenue is to pay attention to analytics. Join The SSI Group’s Will Israel, on April 19th 2017, for a webinar on “Analysis Paralysis – Don’t become a victim! 5 Mistakes People Make with Analytics

The HealthCatalyst people conclude that, “many health systems have hit the pause button on MACRA due to a combination of factors, including its complexity, the newness of the final rule, and uncertainty about whether the new Administration will make further changes. But those marching ahead are finding that compliance is likely to benefit their organization. The bottom line is that systems can choose which measures to report from their 2017 data, even if they haven’t finalized their MACRA compliance plan, and it’s likely worth their time.”

We know there is a lot of revenue at stake under the new MIPS evaluation system, so we will continue to review this for our clients.