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MACRA's vision is that early interventions with children are key to reduce costly chronic diseases later in life. For this to work, education, access and health data interoperability are imperative.

MACRA : “A” is for Access and “C” is for Children

MACRA Changes Health Care Economics with a Focus on Children

MACRA Background: A final rule released on Oct. 14, 2016 by the Centers for Medicare and Medicaid Services (CMS) details the final regulations for implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), the historic Medicare reform law that repealed the Sustainable Growth Rate (SGR) formula last year.

CHIP Background: In 2009, the Children’s Health Insurance Reauthorization Act (CHIPRA) was signed into law, extending and reauthorizing the Children Health Insurance Program (CHIP) legislation and setting forth additional funding and options to expand health care and improve health coverage for eligible children through Medicaid and CHIP.  CHIP is targeted primarily at the Medicaid population.  The Affordable Care ACT (ACA) expanded Medicaid to 138% of the Federal Poverty Level (FPL) for Household Income.  Studying this more deeply, one can see that children have improved access to care in households with income up to 350% percent of the population unless there is a pregnant woman in the home, which then increases the threshold to 400% of FPL. Disabled child populations are also a key focus area of CHIP and Medicaid.

MACRA impacts Medicare payments because it stops reductions in physician payments, switches the framework for quality measurements and it merges prior initiatives together:

  • Repeals the Medicare sustainable growth rate (SGR) formula that calculated payment cuts for physicians.
  • Creates a new framework for rewarding physicians for providing higher quality care by establishing two tracks for payment: 
    • Merit-based Incentive Payment System (MIPS), and
    • Alternative Payment Models (APMs)
  • Combines three quality reporting programs (Physician Quality Reporting SystemValue-based Payment Modifier, and meaningful use of electronic health records.

Healthcare Economic Stimulus Package

One state Assemblyman from Utah who is also a physician believes that improved access to care is the greatest economic stimulus package of all. When families know their children are healthy they are more able to focus on being productive members of society.  For every $1 of funds put into the health care system, he argues, $9 of increases to the economy result in terms of tax paying health care workers and patients who are healthier and more able to work. 

Chronic Diseases

Where do we see the most potential impact on reducing the cost of care?  According to the Centers for Disease Control, “Chronic diseases are responsible for 7 of 10 deaths each year, and treating people with chronic diseases accounts for 86% of our nation’s health care costs.  CDC’s chronic disease prevention system brings together data, health care systems, and communities to support healthy choices and reduce risk behaviors for all Americans.”

The four pillars of the CDC plan are:

  1. Epidemiology and surveillance—to monitor trends and track progress.

  2. Environmental approaches—to promote health and support healthy


  3. Health care system interventions—to improve the effective delivery and

    use of clinical and other high-value preventive services.

  4. Community programs linked to clinical services—to improve and

    sustain management of chronic conditions.

Affordable Access to Care and Ambulatory Care Sensitive Conditions

Access to affordable care is key, and the Affordable Care Act’s Medicaid Expansion improves this access for millions of Americans.  What we do with improved access to operationalize CDC’s pillars is the challenge.  In the U.S. and other countries, studies have found a strong correlation between access to primary care and Ambulatory Care Sensitive Conditions (ACSC).

For example, a 2009 study of ACSC in Italy compared factors there to the U.S.  the ACSC age-standardized rate was 26.1 per 10.000 inhabitants. All conditions showed a statistically significant socioeconomic gradient, with low income people being more likely to be hospitalized than their well off counterparts. The association was particularly strong for :

1. chronic obstructive pulmonary disease (level V low income vs. level I high income RR = 4.23 95%CI 3.37-5.31) and
2. congestive heart failure (RR = 3.78, 95% CI = 3.09-4.62). With the exception of asthma, males were more vulnerable to ACSC hospitalizations than females. The risks were higher among 45-64 year olds than in younger people.

Therefore, CMS proposes shifting the focus on quality to Ambulatory Care Sensitive Conditions and associated readmissions.   

Developmentally Disabled Children and ACSCs

The Academic Pediatric Association published a study that illuminates the correlation between ACSC, disabilities, and readmissions.  Carbone, Young, Stoddard, Wilkes, Trasande, conducted a study regarding the prevalence of hospitalizations for ambulatory care sensitive conditions (ACSC) in children with and without a disability such as autism spectrum disorder (ASD) was conducted which compared inpatient health care utilization (total charges and length of stay) for the same conditions in children with and without ASD. The 2009 Kids’ Inpatient Database was used to examine hospitalizations for ACSC in children within 3 cohorts: those with ASD, those with chronic conditions (CC) without ASD, and those with no CC.

The proportion of hospitalizations for ACSC in the ASD cohort was 55.9%, compared with 28.2% in the CC cohort and 22.9% in the no-CC cohort (P < .001). Hospitalized children with ASD were more likely to be admitted for a mental health condition, epilepsy, constipation, pneumonia, dehydration, vaccine-preventable diseases, underweight, and nutritional deficiencies compared with the no-CC cohort. Compared with the CC cohort, the ASD cohort was more likely to be admitted for mental health conditions, epilepsy, constipation, dehydration, and underweight. Hospitalized children with ASD admitted for mental health conditions had significantly higher total charges and longer LOS compared with the other 2 cohorts.

The conclusion of the study was that the proportion of potentially preventable hospitalizations is higher in hospitalized children with ASD compared with children without ASD. These data underscore the need to improve outpatient care of children with ASD, especially in the areas of mental health care and seizure management.

Delivering Results Requires Education and Interoperability 

Affordable Access and measurement of outcomes will only work to reduce cost if treating clinicians have access to relevant clinical data. In our opinion, the largest investment and opportunities will come not from access, but health data integration and interoperability while ensuring HIPAA and HITECH Act privacy and security.  Medicaid disabled children and their families will need continuing and substantial education about access to care opportunities to enable the health care system to execute on early interventions to reduce costly chronic disease treatments later in life.

CONCLUSION : in MACRA, “A” is for Access and “C” is for Children

Remember that the intent of MACRA encompasses earlier interventions starting with improved Access to care for Children.  It emphasizes the importance of the Children’s Health Insurance Program, or CHIP.   CHIP is focused on those children and families earning less than 350% of the Federal Poverty Level.  Children’s Hospitals across the U.S. and retail clinics that serve families have a unique opportunity ahead.

Michael F. Arrigo

Michael Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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