Taking a Macro View of MACRA

On April 16, 2015, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) became law. Among its provisions, the law touted a permanent “doc fix” that repealed the sustainable growth rate (SGR) formula, which triggered annual automatic fee schedule cuts in Medicare physician pay and temporary Congressional patches.

Designed to improve physician payment, MACRA is a step in the right direction, and certainly better than the alternative, but it’s not magic and it’s not enough. The act overrode the 21% pay cut due April 1, 2015, but it only provided a 0.5% annual pay increase starting July 1, 2015, for physicians and non-physician practitioners for 5 years. After 2019, there are no increases for 5 years. That doesn’t sound like a permanent, sound solution to me. Plus, can a paltry half-a-percent pay raise make a significant difference in physicians’ ability to take care of Medicare patients and maintain healthy practices? Physicians shouldn’t be happy about a raise that size, and they should demand better.

There is no language in the 300-page MACRA to finance repealing the payment formula. The Congressional Budget Office estimates the SGR overhaul will cost $175.4 billion between 2015 and 2025. MACRA will increase the budget deficit by $141 billion, saddling future generations with even more national debt in the trillions. The bulk of the offsets will be derived from Medicare reimbursement cuts to hospitals and post-acute care providers and increased beneficiary cost sharing, including elderly workers paying a greater share of Medicare Part B and Part D premiums.

MACRA is better than the sharp stick-in-the-eye pain the pay cut would have inflicted, but is it a viable solution in the long run, when one considers escalating malpractice and overhead expenses and a rising conversion factor in July? I’m still very concerned that doctors will refuse to take Medicare patients or require extra payments to continue providing service—over even entering the profession in the first place, because it doesn’t provide a living wage.

Passage of MACRA doesn’t end the physician payment debate. Now is not the time for blind acceptance and complacency. It’s time to stand back and ask how does MACRA affect hospitals and health plans? What does it mean to physician practices?

CMS and lawmakers took 18 years to solve the SGR problem and passed legislation at the last minute this year. Delayed decisions cause major administrative snafus and upheavals, rework, claims processing delays, payment backlogs, and interest accruals—not to mention mounting frustration among healthcare workers. Now is a good time to reach out to Congress or your CMS regional office and find ways to solve problems sooner, and to obtain timely updates, rules and regulations. It is an opportunity to work closely with your local health plan organization or the American Medical Assocation and other organizations to ask questions and find a permanent solution to Medicare physician payment. As HHS and CMS begin to implement MACRA’s numerous provisions, make sure your voice is heard for a successful outcome.