Treating Medicare patients no longer pays for itself for many physicians, according to a recent Medical Group Management Association (MGMA) Stat Poll. Two-thirds of respondents (67 percent) said expected 2019 Medicare payments will not cover the cost of delivering care to beneficiaries, leaving practices to make up the difference with payments from commercial insurance companies.
In that same study, only 16 percent of the 478 respondents expect Medicare payment rates to exceed their practice’s cost of delivering care to beneficiaries. Seventeen percent said they expected the rates to be equal to covering costs.
For years, providers perennially worried about steep cuts to the Medicare Fee Schedule under the Sustainable Growth Rate formula (SGR). Expected relief came in the form of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which was passed to both stabilize Medicare payment rates and also create a value-based program of incentive and risk for providers. But according to MGMA, “under MACRA’s revised methodology for updating the physician fee schedule, Medicare fee-for-service payments are not keeping up with inflation or the cost of running a physician practice.”
For instance, an annual .5 percent increase was applied to the fee schedule in the first three years under the MACRA Quality Payment Program. However, after other mandated adjustments are made, the Medicare conversion factor has changed very little, increasing by only +$.2348 since 2016. As well, MIPS payment adjustments, which are being applied for the first time in 2019, so far have amounted to less than 2 percent for most providers, though at times they were speculated to be as much as 22 percent with the budget neutral incentive factor.
“This well-intentioned program is costing practices money to comply, with little promise for financial reward,” writes Mollie Gelburd, JD, and Drew Voytal, MPA, both of MGMA Government Affairs.
The other great hope of Medicare payment reform, advanced alternative payment models (APMs), have also turned out to be a good option, but there aren’t nearly enough of them. “There are a mere eight national advanced APMs in 2019, and options to join an APM are particularly limited for specialty providers,” Gelburd and Voytal explain.
Which leaves some providers worried about “Medicare for All,” which has been floated in Congress and is increasingly becoming a talking point, if not a major platform issue, for the 2020 presidential election.
“Physician practices can’t afford to provide services on a ‘Medicare-for-all’ reimbursement model,” tweeted Brian Ramos, COO at Maryland-based Capital Anesthesia Partners, in a Twitter post about the MGMA survey. He referenced an oft-cited statistic that Medicare reimburses anesthesiologists only 33 percent of what commercial insurers pay.
As for the way forward, MGMA advocates a multi-pronged approach. First, they envision an updated approach to fee-for-service.
“Even if a payment system provides the right incentives, if the underlying reimbursement rates are too low, the system is not sustainable for physicians to continue providing high-value care,” MGMA suggests.
Also, more APMs are needed.
“Testing and designing more APMs that physicians and patients want to participate in is one way to address this volume problem,” MGMA concluded.
For more information about the MGMA Stat Poll, check out the MGMA Data Insights article “Medicare reimbursement falls short of care delivery costs.”
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