The media has been full of interesting bits about the future of healthcare under the Affordable Care Act. There is no question that the glaring flaws in the overly optimistic financial structure required to continue health care under the ACA merit attention. Whomever thought the young and healthy, who are often living on a paycheck-to-paycheck budget, would willingly spend a mortgage-sized portion of their income supporting the healthcare for the elderly or infirm apparently spent their own youth testing the health effects of certain controlled substances while scraping by on their sizeable trust funds. (In a profound statement of the obvious, AETNA’s CEO admitted “Young People Pick Weekend Beer Over Obamacare.” Seriously, was this ever in doubt?)
But while so much attention is devoted to that five-alarm fire, some attention must be devoted to the embers from that fire which are landing in the tender laden structure of the Medicare program. As flimsy as the Medicare program is, held together by patches and other “fixes,” this simple spark may bring it all down in a flash.
I am referencing the Medicare Access and CHIP Reauthorization Act, called MACRA. If you did not know what MACRA referenced, you are not alone. Most physicians do not know much about it, and I wonder if many of the lay public does. But beyond recognizing that MACRA references something to do with Medicare, even fewer know how it will impact health care delivery in the United States.
MACRA was created with the best of intentions. For years, physician compensation under Medicare had been based on the sustainable-growth rate (SGR) formula. Everyone despised the formula, as each year the formula threated to make drastic cuts in physician reimbursement to prevent increasing Medicare expenditures from exceeding the increase in Gross Domestic Product.
Because health spending was growing faster than GDP, the law would result in dramatic cuts to physician compensation. Recognizing that such cuts would be detrimental to patients, Congress voted 17 times to not implement the formulaic cuts in compensation. Before MACRA, physicians were facing a greater than 20% cut in compensation in 2015.
Now it appears many physicians, if not most, will face significant cuts in compensation under MACRA as well.
Ronald Reagan once said “the nine most terrifying words in the English language are: I'm from the government and I'm here to help.” MACRA is no exception. It is a bipartisan attempt to rein in health care spending by tying pay to performance. In other words, better results merit better pay. What could go wrong?
The first thing one should understand about MACRA is that it is not a simple fix. Congress, as it often does, provided some guidelines that left the nuts and bolts of implementing the Act to the same folks who could never make the SGR work. Weighing in around a thousand pages, the implemented program will impact every physician who provides care for more than 100 Medicare beneficiaries in a year, or who bills Medicare more than $30,000 in a year. For those not initiated into the mysteries of Medicare, recognize that these are a very low threshold, so almost every physician treating federal healthcare beneficiaries meets these criteria.
MACRA requirements have been delayed so providers do have a bit of time to prepare. The plan was intended to begin in January 2017, but the collection of the performance data at the heart of the program may be delayed until October of next year. This data must be submitted to the government to verify compliance. There are several options for participation, which require differing amount of data to be collected and disclosed. As you might imagine, the more data you offer up, the greater the potential incentives, provided they show a practice surpasses the appropriate threshold. Failing to participate leads to an ever-greater decline in reimbursement.
For those who counter by assuring everyone that those who deliver quality care will be rewarded, leading to an improvement in healthcare delivery, the lesson of Dartmouth’s departure from the Accountable Care Organization (ACO) arena appears to have been lost. The standards do not allow for those most vexing of medical variables – human choice and free will. Patients do not have to follow their physician’s advice, and the physician may pay for that patient’s right to ignore them.
Particularly disturbing is the intrusion of MACRA into actual delivery. As noted in an earlier blog, physicians are spending more time entering data into the “more efficient” electronic health record than providing health care. No one can argue MACRA will force providers to shift their attention even more towards the computer screen. How can this be good for anyone?
Our health care system needs a feel-good story, and the ACA has not offered it yet. ACOs have not delivered on their hypothetical promise. Years ago, many were predicting it made little financial sense for the healthy young to participate in the ACA. Health insurance premiums are rocketing to unheard of heights. The promise of reduced burdens on our emergency rooms has been deemed empty by the government, who admitted there were few differences in ER use before and after the ACA was implemented. Doctors spend less time caring for patients and more time dealing with electronic health records than with patients. Now MACRA’s de facto Hobson’s choice for providers will likely make medicine even less efficient, perversely decreasing quality in the name of improving it.
Welcome to the brave new world of healthcare.
Contact the Spiers Group for more on the impact MACRA will have on your practice.