Doctors Can Expect Pressure to Compete Under MACRA Changes

Tony Hagen @oncobiz
Published: Sunday, May 10, 2015
Dr. Blase N. Polite

Blase N. Polite, MD, MPP

The signing of the Medical Access and CHIP Reauthorization Act of 2015 (MACRA) ends the yearly nightmare of congressional budget wrangling associated with the Sustainable Growth Rate (SGR) formula, but it will intensify the pressure on both physicians and the Centers for Medicare & Medicaid Services (CMS) to achieve a leaner, more effective health payment system. Oncologists and other physicians need to acquaint themselves with the new legislation, and if they have any ideas for improvement, those need to be registered with CMS quickly, advises Kavita Patel, health policy scholar and managing director Clinical Transformation at the Brookings Institution, an independent research organization.

The clock is ticking, Patel warns. “Like many things in Washington, it took a long time for us to get to this stage where we had an SGR fix, but the timeline for this is pretty aggressive. By the fall of this year CMS has to deliver on some of these programs, so the time for feedback is right now. Doctors should become familiar with the provisions in this legislation, and respond to it quickly.”

MACRA eliminates an unwieldy formula for determining physician Medicare payments and brings doctors a big step closer to what the Department of Health and Human Services has envisioned as a value-based care environment. Signed into law last month by President Obama, the legislation contains a broad set of incentives for doctors to meet performance measures, which are designed to end the practice of relying on volume of care to build up revenues.

“I think this will really up the stakes for us, and I hope this will bring us to the stage in 2019 where we have much more flexibility to innovate with ideas that are coming from the ground up,” Blase N. Polite, MD, MPP, chair of the Government Relations Committee for the ASCO, told Oncology Business Management.

CMS Will Be Listening

Polite, a medical oncologist with University of Chicago Medicine, is optimistic that the level of involvement physicians had in helping to design MACRA and the changes that were incorporated into the $200-billion-plus spending measure mean that CMS will be more receptive to physician input in the future as the incentive plan is refined. Patel agrees that physicians do have an ear at CMS. “I do think that CMS has an intention of working with doctors to achieve a balance. It is just as all things are: the devil is in the details. There are a lot of aspects of this legislation that CMS has to turn into policy, so I do think the dialogue with CMS right now is pretty important.” That being said, these changes have been legislated, and CMS is under a mandate to implement them, Patel says.

Kavita Patel

The SGR, designed to keep physician payments in line with inflation and the gross domestic product, was blasted for its reliance on huge congressional spending adjustments each year to avoid wild swings in physician compensation. This year, a threatened 21.2% SGR cut in spending helped to prompt movement on the repeal measure.

The replacement package involves $175.4 billion in additional spending over 10 years to keep physician payments stable and to incentivize improvements in coordination, efficiency, and quality of care delivered. The bill also would temporarily extend the Children’s Health Insurance Program (CHIP) and a number of other expiring provisions related to Medicare, Medicaid, and certain grant programs.

An analysis by the Congressional Budget Office has predicted that through 2025, MACRA will increase direct spending by about $145 billion and revenues by about $4 billion, causing a net increase in federal budget deficits of $141 billion.1

The program will lead to modest improvements in physician pay over the next several years, with much higher increases and also bonuses to kick in later, based on measures of performance and whether physicians participate in alternative payment models (APMs), which CMS believes will be key to cost-efficient high quality care.

Steep Pay Cuts Are Possible

Some of the pay adjustments that may result could reduce CMS compensation for physician services by up to 9%, but Polite notes that there are opportunities for physicians to receive fairly substantial pay increases and bonuses. “Those at the top end could receive as high as a 27% bump,” he says (Figure). Those who enter the APMs may eventually qualify for 5% bonuses that are based on their Medicare payments over the previous year.

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