Small practices likely to be ‘losers’ under MACRA

May 4, 2016

CMS acknowledges that smaller practices will face penalties of $300 million under MIPS in year one.

In 962 pages of the proposed rule for the implementation of the Medicare Access and Summary CHIP Reauthorization Act of 2015 (MACRA), it is a single chart that speaks volumes about the potential future for smaller U.S. medical practices.

Tucked away on page 676 of the proposed rule outlining the details of the Merit-based Incentive Payment System (MIPS), CMS estimates that 87% of the nation’s solo practices (nearly 103,000 physicians) will face a penalty in 2019, the first year of the program, to the tune of $300 million. The news is equally as pessimistic for practices of two to nine physicians (an estimated 124,000 physicians) who could see penalties to the tune of $279 million

 

Related: 7 things physicians need to know about MACRA proposed rule

 

If the rule stands as currently drafted, Ingrid Lund, PhD, practice manager for research and insights at The Advisory Board Company, says MACRA could profoundly change the care delivery landscape.

Ingrid Lund, PhD

“There are winners and losers [in MACRA] and smaller practices are more likely to be the losers,” Lund told Medical Economics. “It appears the proposed rule would create a penalty system where the big guys [larger practices] will be funded by the little guys.”

 

Further reading: Medical societies pleased with MACRA rule

 

Lund, who works primarily with independent medical groups in her work with the consulting firm, says that it is up to these smaller groups to take advantage of the comment period (through June 26) to push to change the winners-losers dynamic under MACRA and maintain the strength of independent practices.

Next:  “Independent groups are going to feel more vulnerable"

 

 “Independent groups are going to feel more vulnerable,” she says. “We’ll likely see even more of these physicians look to be employed … to meet these challenges, so there’s a lot of reason for concern. We’ve already seen a lot of interest in the merger and acquisition space [by independent practices] and this is likely to boost that interest.”

Taking the first steps

In addition to commenting on the proposed rule, Lund encourages independent practices to assume that their participation will be through the MIPS path and not its alternative, the advanced payment models (APMs). Even CMS estimates that only 4% of these practices would qualify for APM status and even then, they would need to report MIPS data.

“Operate as if you are in the MIPS track,” she says.

 

Tips: Finding the best MACRA rout to provider reimbursement

 

Furthermore, she strongly advises practices not to try-in the next seven months or even shortly thereafter-to adopt an APM model such as an accountable care organization or participation in the Comprehensive Primary Care Plus program for the sole reason of APM track qualification.

“It does not make sense to dramatically overhaul your payment model strategy,” she says. “It is too late and this is too dramatic a change.  And I don’t know it makes sense.”

What practices can do is start focusing on quality reporting, especially the six measures identified under the quality category that will comprise 50% of a physician’s MIPS score.

“Now is the time. There’s not a minute to waste,” Lund says.

Under MIPS, in addition to quality, physicians are reimbursed based on their performance in three categories: cost, which replaces the current Value Based Modifier Program, at 10%; clinical practice improvement, at 15%; and advancing care information, replacing Meaningful Use and evaluating use of health IT initiatives, at 25% in year one of the initiative.

Next: The biggest challenge

 

John Moore, founder and managing partner of healthcare analyst firm Chilmark Research in Boston, Massachusetts, agrees that the sooner small practices deliberate and decide on quality measures they will report on, the better.

“The biggest challenge for the vast majority of physicians is simply defining what measures that they will be required to report out on best match their practice,” Moore says. He adds that these groups should examine what quality measures are the easiest to collect with existing or slight modifications to current workflow and whether measure collection will vary from physician to physician in a single practice.

“As quality measures alone represent 50% of [the MIPS] score, attention needs to focus here first,” he says.”

Similarly, with advancing care information representing another 25% of a physician’s score, Moore advises physicians look at “what has or will work best” based on current experience and workflows.

“For example, if practice has highly engage consumer/patient base that are using the patient portal, then make that one of the measures to hit,” he says.