Everybody agrees that health care costs remain on an unsustainable growth curve at both the federal and state levels, Charles J. Lockwood, MD, MHCM said during Sunday morning’s “The Economics of MACRA for Ob-Gyns” Clinical Seminar.
As Medicare spending heads for 14.5 percent of the federal budget, three options exist to reduce costs.
“First, increase the payroll tax to cover it—the Republicans will never approve that,” he said. “The second is to increase the age of eligibility for Medicare. Democrats would never approve of that. And the third is to reduce payments to providers. So that’s what they’re going to do, and MACRA is the blunt instrument that they’re going to do it with.”
Dr. Lockwood, senior vice president, USF Health, and dean of the University of South Florida Morsani College of Medicine in Tampa, discussed how health care providers can proceed as MACRA, the Medicare Access & CHIP Reauthorization Act, takes effect. Despite all of the changes in government, he said, MACRA is one thing that won’t go away, as it passed with and maintains significant bipartisan support.
MACRA came from the restructuring of health care delivery to align incentives to focus on value. Patients want to pay less, payers want lower cost and better quality, and health care providers want to preserve margins. CMS led the way in changing the payment model, and most others are already following or expected to follow.
Health care providers have two payment options under MACRA: Merit-based incentive payment system (MIPS) or Advanced Alternative Payment Models (AAPMs).
Most physicians, especially those in private practice or not part of a giant 1,500-provider group, are going to be enrolled in the MIPS. Under MIPS, Dr. Lockwood said, four performance categories will impact payments:
- Quality—“the old PQRS, but on steroids”
- Cost—all costs created by the doctor (specialist referral, hospital imaging, etc.)
- Advancing care information (EHR usage)
- Clinical practice improvement activities
“In the abstract, these are all great,” Dr. Lockwood said. “We should be doing these things, and many of us do them. It’s the requirements to deal with the bureaucracy to get paid that are the problem.”
Using these metrics, MIPS scores the physician against all other physicians taking care of Medicare patients in the US. While the scoring is astonishingly complex, Dr. Lockwood said, in some sense, the outcome is simple: Most physicians will lose money. Estimates say that while some doctors will receive bonuses of up to 27 percent, about 75 percent of health care providers will pay a penalty for not meeting the quality threshold.
Dr. Lockwood reminded attendees that the quality threshold that determines payment or penalties will always be moving as all the other physicians also work to improve their scores.
AAPMs offer an alternative for those willing to create an integrated network. To qualify, AAPM providers must have a certain percentage of Medicare payments and patients and use certified EHR technology.
Practices using AAPMs have to bear some financial risk. In this system, which Dr. Lockwood called “two-sided accountable care,” base payments are comparable to MIPS but easier to meet and simpler. AAPMs also offer a 5 percent annual bonus and allows the physician to keep budgeted money not spent, so the opportunity is there to make more money.
“ACOG has great resources they are providing, and they will increase over the next few years,” he said. “They are really terrific, and there’s lots of seminars and courses. You really do need to spend a weekend with this, not 40 minutes with Charles Lockwood, to really understand all the nuances.”
ACOG TV interview with Dr. Barbara Levy on MACRA