Many physicians face potentially large Medicare payment cuts because the default payment track is revenue-neutral.


May 3—Some healthcare industry advisers expect the Trump administration to relax 2018 quality-reporting requirements under Medicare’s new physician payment system—similar to the approach implemented by the Obama administration for 2017.

The expectation of further concessions on the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) stems from projections that 90 percent of the more than 700,000 affected physicians will start out in the Merit-based Incentive Payment System (MIPS) track. If physicians don’t meet the intensive quality-data collection, reporting, and performance requirements under MIPS, they face cuts that accelerate to potentially 9 percent of their total annual Part B payments.

Facing backlash over expectations that most physicians would face cuts under MACRA, the Obama administration softened the launch by allowing clinicians to avoid penalties in 2017 if they provide 90 days of reporting on just one quality metric.

“There is actually a budget-neutrality element to it, so there will be winners in MIPS and there will be losers, with the exception of this year—and I have a political prediction that next year will also be pretty flexible,” said Kavita Patel, MD, a former White House healthcare advisor. “We will see two years of flexibility, at least, in MIPS because there’s been enough consternation and confusion that people just don’t know how to succeed.”

To avoid Medicare payment cuts after the expected two initial years of flexibility, Patel urged physicians to evaluate their own quality performance, then think of ways to optimize their activity within the fee structure to gain revenue while building in the needed quality infrastructure. Such infrastructure can carry a high price tag, with Patel finding an average startup cost of between $5 million and $25 million for an accountable care organization (ACO) with 15,000 to 25,000 enrollees.

“And now if you are taking risk, that [dollar figure] is probably going to increase,” Patel said at this week’s World Health Care Congress in Washington, D.C.

MACRA changes by the Trump administration are expected to include a “streamlining of the reporting mechanisms,” said Valinda Rutledge, a vice president with Greenville Health System. “It’s nice to have 300 quality indicators to choose from; it’s a little overwhelming.”

The administration has asked for industry input on reducing MACRA reporting requirements while maintaining the core approach to continue the momentum in the shift to value-based payment.   

Jeffrey Hausfeld, MD, chairman and founder of the Society of Physician Entrepreneurs, acknowledged that if clinician advocates push hard enough on Congress, legislators may support a relaxation of data-reporting requirements or a delay in enforcement.

“We can always kick the can down the road,” Hausfeld said. “At some point, we as physicians and we as people that are running hospitals and surgical centers have to understand that in order to bend the cost curve, we need to make changes. And if we’re not willing to make those changes and we keep postponing it, it’s never going to happen, so sometimes you have to force the issue—and that’s the burning platform.”

However, if practices “have enough infrastructure in place and enough leeway in the parameters to allow them to get on board, then I think we’re OK,” Hausfeld said in an interview.

No Expectations

Jordan Asher, MD, chief clinical officer at Ascension Care Management, said his organization is implementing MACRA preparation for its employed and affiliated physicians under the assumption that there will be no extension of the 2017 “soft launch.”

Ascension has focused on “how do we use the time to get better, not how do we use the time to stall what we really need to do,” Asher said in an interview.

Asher urged health systems “not to waste the year that has been given to us” or assume that every part of their organization understands the impact of MACRA.

MACRA preparation at Ascension includes weekly meetings between various stakeholders, ongoing physician and administration education, and the launch of MACRA oversight committees that include senior leadership.

“We’ve gone in [looking] to be successful in doing what we really want to do within the present environment,” Asher said.

Asher said he doesn’t see any “roadblocks” for physicians in implementing MACRA, although the new requirements are likely to lead an unknown number to retire. But those retirements are expected to be offset by changes in care delivery that focus physicians on certain care while allowing mid-level practitioners to practice at the top of their license.

“Does it make sense for you as a consumer and for me as a highly trained provider to be taking care of your sore throat? Probably not,” Asher said.

Consolidation Accelerator

The talk of slowing MACRA implementation comes amid widespread industry agreement that it is likely to spawn greater healthcare consolidation, including acquisitions of many—if not all—small practices.

“There will be tremendous consolidation in health care,” Hausfeld said. “Unfortunately, it may lead to the demise of the private-practice physician only because we won’t have the infrastructure to answer and report all of the things that we need to report to get paid.”

Hausfeld expects the share of physicians who are employed to increase over the next decade from less than half to more than 80 percent.

Scott Hines, MD, chief quality officer and medical director for Crystal Run Healthcare, also expects more physician consolidation over the next five years.

Practices of up to 10 physicians will find it very difficult “to have the competencies and the resources to not just succeed but to report under MACRA and to be able to play in the commercial space as well,” Hines said.

The Centers for Medicare & Medicaid Services has recognized that challenge and responded by offering small practices the opportunity to form virtual pools of providers that share quality-reporting responsibilities.

“But it’s difficult even in an integrated group to get providers to swim in the same direction,” Hines said. “And when you have no control over the provider because you are just virtually connected, that seems nearly impossible.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Wednesday, May 03, 2017