Policy & Regulation News

MACRA Fee Adjustments May Generate Financial Consequence

By Jacqueline DiChiara

- Physicians and healthcare providers may endure an even greater financial consequence under the $200 billion Medicare reform package signed by President Obama last week, H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA) than before its legislative implementation.

Medicare Access and CHIP Reauthorization Act

According to a recent Forbes article by John R. Graham, Senior Fellow at the National Center for Policy Analysis and the Independent Institute, because H.R. 2. fee adjustments are not connected to inflation, doctors will fall behind if inflation increases beyond current estimates. To resolve this dilemma, annually revisiting the fee schedule will lessen collective financial headache within the healthcare industry at large, says Graham.

Graham spoke with RevCycleIntelligence.com this week to offer further insight into his recent Forbes piece which was published before the Senate’s 92-8 repeal last Tuesday.

RevCycleIntelligence.com: The SGR was passed. What are the financial implications for physicians, payers, and providers at large?

  • Inpatient Hospital Prices Rose 19%, Outpacing Physician Prices
  • Costly Aspects of an Overstretched Revenue Cycle Management
  • Does Vermont have the least expensive healthcare costs?
  • John Graham: In the short term, physicians will not have to stress out about whether Congress will pass a "doc fix" every year. However, because the increases are nominal rates, inflation will eat away at the increases ever year. So, by 2020, the fees will almost certainly fall below the cost to operate a practice.

    RCI.com: Why might it be best for physicians and payers to revisit the fee schedule annually?

    JG: It's better for taxpayers, because Congress would be forced to make tough decisions between all its obligations. Already, most federal spending is entitlements, on autopilot.

    RCI.com: In relation to MACRA, what are the greatest implications as physicians face increasing requirements to comply with federal regulation to get paid?

    JG: The Meaningful Use requirements of the EHRs are being ramped up in this bill. CMS has already spent $29 billion of $30 billion on this program, which is driving doctors crazy. Most were hoping that once this money was spent, they could put the whole miserable experience behind them. Unfortunately, this "doc fix" has the potential to turbocharge EHRs by making payment even more dependent on complying with them.

    RCI.com: Is the doc-fix a permanent solution to the fee problem?

    JG: Not at all. By 2020, the real value of the fees will be significantly lower than they are today. However, it does give physicians' lobbyists a competitive advantage over others who get their income from the federal government.

    H.R. 2. was passed by overwhelming majorities of both Democrats and Republicans without being paid for. Since 2010, both parties have consistently promised to pay for an expansion of government spending. By getting both parties to break this pledge, uniquely for physicians, physicians will have an advantage when they come back for more money. Congress has already "crossed the Rubicon," so it will be easier to do it again.

    Further, it increases the power of the specialty societies, which will determine value and quality. The problem is that each is mandated to develop measures to pick winners and losers within its own specialty. That is a lot harder than developing arguments for why your specialty should be paid more than others. So, they will face significant obstacles to developing the measurements in time.