Clinician Insights

Many Physicians Predict Mass Exodus From Medicare Over MACRA

June 30, 2016

Almost four in 10 physicians in solo and small group practices predict an exodus from Medicare within their ranks on account of the program's new payment plan and its punishing penalties, a Medscape Medical News survey reveals.

Fifty-nine percent of physicians in practices with fewer than 25 clinicians also said they expect to receive a performance penalty as high as 4% under proposed regulations that implement the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Only 9% of physicians in under-25 groups expect a bonus, with another 12% counting on no change in compensation.

Roughly one third of physicians in small practices said merger into larger groups promises to be the most likely fallout from MACRA.

This pessimistic outlook was more than matched by reader comments on the survey, posted on May 5. "Death by bureaucratic strangulation," one emergency medicine physician wrote.

MACRA replaced Medicare's sustainable growth rate formula for setting physician reimbursement with the Quality Payment Program, which represents a shift from fee-for-service to pay-for-performance. The Quality Payment Program has two tracks: the Merit-Based Incentive Payment System (MIPS), which most physicians will initially participate in, and Advanced Alternative Payments Models for physicians more accustomed to getting paid based on how they perform on quality and cost-control measures.

None other than the Centers for Medicare & Medicaid Services (CMS) primed physicians for a glum outlook on the new payment system. In proposed MACRA regulations issued on April 27, CMS estimated that most physicians in groups with fewer than 25 clinicians in MIPS will get penalized in 2019 on the basis of their low performance scores in Medicare incentive programs in 2014 (failure to report data was the biggest culprit). Worst off are soloists, who have a projected penalty rate of 87%.

In contrast, CMS estimated that 81% of physicians in group with 100 or more clinicians will earn a bonus.

The proposed regulations noted that "considerable uncertainty" surrounds the forecast, explaining that physicians may respond differently to MIPS than they did to Medicare incentive programs such as the Physician Quality Reporting System in 2014. CMS Acting Administrator Andrew Slavitt went a step further in damage control by saying the estimates "don't represent reality."

In a speech to the AMA's House of Delegates earlier this month, however, Slavitt conceded that physicians who fail to report MIPS performance data to CMS "will be negatively impacted."

CMS Is Trying to Allay Physician Fears

As of June 9, 286 physicians had completed the online survey, 91% of them in practices with fewer than 25 members. In this small practice category, soloists were the least likely (6%) to expect a MIPS bonus in 2019, whereas physicians in groups of 10 to 24 members (13%) were the most likely.

CMS estimates that 54% of all physicians in MIPS will receive a bonus, most of them in practices with more than 24 members, and 46% would be penalized.

Thirty-eight percent of small practice physicians who completed the survey said the most likely trend resulting from MACRA would be the merger of smaller practices into larger ones. This trend began well before MACRA, as physicians have sought safety in numbers in response to economic pressure from Medicare and Medicaid, private insurers, hospitals, computerization, and other market forces.

Table. Small Practices Have MACRA Anxiety

  Total Physicians Number of Clinicians per Practice
Do you expect to receive a bonus or penalty under the new guidelines?   1-24 Solo 2-9 10-24
 Bonus 11% 9% 6% 11% 13%
 No change in compensation 15% 12% 11% 12% 20%
 Penalty 55% 59% 64% 61% 33%
 Uncertain 19% 20% 20% 15% 33%
  (n = 286) (n = 260) (n = 132) (n = 98) (n =3 0)
What do you think will be the most likely trend that results from the new CMS guidelines?          
 Most soloist clinicians and small group practices will merge into larger groups 37% 34% 20% 48% 50%
 Most soloist clinicians and small group practices will stay independent 11% 12% 14% 9% 10%
 Most soloist clinicians and small group practices will drop out of Medicare 36% 38% 44% 34% 27%
 Not sure what the most likely trend will be 16% 16% 22% 9% 13%
  (n = 286) (n = 260) (n = 132) (n = 98) (n = 30)

Source: Medscape Medical News

CMS is trying to allay physician fears about MACRA. It has budgeted $100 million during the next 5 years to help small practices get up to speed on the law. The agency acknowledges that complying with MACRA, particularly its reporting requirements, promises to be harder for smaller practices than bigger ones, which have more financial and personnel depth. Andrew Slavitt has said that his agency will strive to make the new payment plan easier for small practices to master as it fine-tunes its regulations, which are expected to come out in final form this fall. The deadline for commenting on the proposed regulations was June 27.

It will take lots of allaying to win physicians over to MACRA, judging by some readers' comments.

"Several years ago, someone high in CMS told me that practices like mine will not exist in the next 5 years," said an internist in a small geriatric practice. "His timetable is coming true, and CMS is orchestrating the execution."

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