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Tag Archives: MACRA

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Impacts of MACRA on Small Medical Practices

Mounting pressure is being felt by small medical practices universally. This leads to making them join hospital staff, join larger groups, or even just fade away. The Medicare Access & CHIP Reauthorization Act of 2015 is quoted to be one of the crucial causes for this hardship and the struggle to survive. This new law dictates how physicians are to be paid by Medicare!

Basics of MACRA
The Medicare Access & CHIP Reauthorization Act (MACRA) of 2015 is considered to be an attempt aimed at changing the health care in such a way that payment toward services is based on quality of service rather than quantity. It replaces the earlier system of reimbursement that was not satisfactory to physicians. Doing away with the supposedly wasteful spending of over a third of the whole health care budget, this new system is being received well. There are risks involved, however.

How does MACRA work?
There are two broad payment systems under MACRA, out of which physicians need to choose one. The first one is associated with doctors exceeding the standards of care quality and it offers a bonus of up to 4% on the Medicare reimbursements. This is expected to go up to 9% by the year 2022. Those physicians who score below the standards set will have to face penalties.

The second method, called Alternative Payment Models (APM), determines care quality through the physician in the organization itself. In this, doctors receive an annual bonus of 5% from 2019 through 2024. The physicians in the facilities will continue getting payment adjustments from 2026 onwards.

The intention behind pushing physicians into larger organizations is the view that better care delivery will be possible at lower cost. This is made possible as they have better revenue cycle management processes, more resources in hand, and expenses may be brought down by seeing increased number of patients. The flip side is that it leads to the end of smaller medical practices with one or two physicians.

How would be the future of MACRA?
One issue with MACRA is it penalizes doctors for limiting the number of Medicare patients they see or avoiding Medicare entirely. Moreover, practices in rural areas may not be able to support larger physician practices. It would lead those in rural areas to leave for joining hospital staff in cities or joining larger organizations.

Reporting physician care to government involves the burden of additional layer of paperwork that costs hefty amounts of money. There is no system in place as of now, necessitating creating one – adding to the general burden in health care. Making this law functional will involve considerable efforts and the impacts will be realized after years.

MACRA is no doubt of controversial nature. It might lead to the end of small physician practices as being perceived presently. However, concerns expressed by various doctors will be addressed and the necessary modifications are likely to be carried out. MACRA is expected to have a telling impact over health care of Medicare patients.

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What is Needed and What is at Stake with the new Payment Reform of MACRA

The Sustainable Growth Rate (SGR) system that had been used for payment toward physician services in Medicare has been repealed by The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Although considered conceptually sound, a large portion of final legislative language is supposed to be vague and complex. Its success or failure depends on the decisions related to implementation of the law.

MACRA Basics
The Centers for Medicare and Medicaid Services (CMS) has released a 962-page proposed rule related to the implementation of MACRA’s key provisions. Although some adjustments have been made based on input from stakeholders, there is much work yet to be done. Major areas of concern need to be addressed in the final rule. Care has to be taken to ensure that necessary infrastructure is in place in support of the legislation.

Payment Reform under the new Act
Two different tracks of physician payment in Medicare have been established by MACRA. The first one is the Merit-Based Incentive Payment System (MIPS) and the other, Alternative Payment Models (APMs). Quality Payment Program (QPP) happens to be an amalgamation of these two. However, option to choosing one of these may not be offered to a majority of physicians in the immediate future.

Having been ridden with substantial reporting burden, MIPS may not be attractive over the next decade. This will be more so in the case of small practices that are likely to experience substantial cuts on reimbursement.

Burdens if MIPS
Drop in Reimbursement: Those who opt for MIPS will be average in performance scores, will find their inflation-corrected Medicare Reimbursements declining roughly by 18% over the next decade. Small practices operating with narrow financial margins may find their fees being reduced by 20%.
Lack of Equity: Apart from budget neutrality conformation, not much about payment adjustments is equitable in MIPS.
More administrative burden: MIPS being a complex Pay-for-performance program has substantial administrative burden. There is not much evidence to prove that significant improvements in quality of care can be achieved by pay-for-performance programs

Providers who wish to avoid the burdens of MIPS can do so by participating in advanced APM. Clinicians who have enough share of revenue from one or more APMs are eligible for 5% incentive payment from 2019 through 2024.

The objectives of MACRA – repealing the SGR, stabilizing physician payments, and fostering meaningful payment reform are agreeable. However, the situation created by the final legislative language makes MIPS becoming increasingly untenable for a huge number of providers. They may also be left with nowhere else to go by the scarcity of available APMs.