A few weeks ago, I had the privilege of attending our annual Fresenius Medical Care Medical Directors meeting. The meeting was well attended and the participants were actively engaged. The MACRA workshop was very popular, and I lost track of how many conversations I had with nephrologists about our involvement in the ESCO program. One thing I was struck by during the meeting was the substantial variability in our attendees’ understanding of MACRA. Within that context, I thought I would revisit a couple of important items and share a bit of perspective about Medicare’s new approach to physician payment.
I think it’s important to begin with a look back at where we’ve been. Prior to MACRA we contended with 2 things that MACRA eliminated. First, the sustainable growth rate (SGR), which was a remarkably flawed formula designed to use growth in one part of the economy to automatically adjust the reimbursement Medicare provides to physicians. In theory an admirable idea, in practice a disaster that required Congress to engineer a “doc fix” every year in order to avoid fee schedule cuts in the range of 20%. MACRA eliminated the SGR. Second, up until very recently and independent of the SGR, you or more likely your practice administrator spent hours dealing with three unrelated CMS incentive programs: PQRS (relatively easy for nephrologists as we had our beloved CKD measures group and we were paid for reporting, not for performance), the physician value-based payment modifier or VM (which only 2 nephrologists in the country understand and both have no clue how to move the needle), and last but not least, everyone’s favorite Meaningful Use (which thankfully many nephrologists could avoid due to the 50% rule). MACRA sunset those independent CMS incentive programs at the end of last year.
What’s lost on many nephrologists is the fact that MACRA replaced the SGR with the Quality Payment Program. Now it’s your performance in the Quality Payment Program (QPP) that sort of does what the SGR was intended to do. The important caveat is that the SGR modified the fee schedule that every Medicare provider used. In the new world, what you are paid is now a function of how well you perform. In a few years this means there could be as much as a 20% difference in what you are paid by Medicare to render a level 2 inpatient visit compared with your cardiology colleague seated next to you in the ICU who’s delivering the same level of service. In fact, at the extremes, the difference individual docs see in the physician fee schedule could be as high as 46%. As we’ve noted before, the Merit-based Incentive Payment System (MIPS) is a budget-neutral program in which the “low performers” subsidize the higher fee schedule enjoyed by the “high performers”.
Fix or problem?
Not surprisingly, when you have a generational policy change that impacts the way the largest insurer on the planet pays physicians, you see a lot of opinion published regarding the program. During the medical directors meeting one of my colleagues, Dr Andy Howard, shared an opinion published in the Annals by an individual who focuses on public policy. In a piece cleverly entitled “MACRA: Big Fix or Big Problem?” Dr J. Michael McWilliams argues we’ve made a mistake with MACRA. Dr McWilliams raises some valid points, but I must say I take issue with a few of his concerns. Appropriately, the author points out that the budget-neutral aspect of MIPS only applies to your fee schedule adjustment. In other words, this does nothing to directly contain the volume of work docs will do. In fact, Dr McWilliams suggests that those of us that crush MIPS and earn the maximum positive fee schedule increase will have a financial incentive to do more work (because we are now paid 104% of the Medicare fee schedule). While he is correct, the incentive is there, practically speaking it’s hard for me to believe nephrologists who find themselves on the right side of MIPS will suddenly begin seeing more patients or performing more procedures because of the lure of the fee schedule change.
Dr McWilliams is also concerned that the total cost of care is buried within the cost category of MIPS and that it’s vastly underweighted. The implication being that the very thing we are trying to influence within a value-based payment program is inconsequential. Again, I cannot argue with his logic, but practically speaking, the cost side of the VM upon which the MIPS cost category is based is so complex most nephrologists have no clue which Medicare beneficiaries have been attributed to their practice, which likely precludes them from moving the needle on this section of MIPS.
Finally, the author surfaces another aspect of the program, one that certainly warrants our attention. This criticism is related to the quality side of MIPS. Dr McWilliams points out we have the opportunity to select our quality measures. Those of us that understand “the game” will choose wisely, those who do not, won’t. Perhaps more even troubling than this “gaming” opportunity is a point Dr McWilliams has addressed before. If patient populations are not appropriately risk scored, then a budget-neutral program effectively rewards providers who care for relatively healthy patients, and penalizes those who care for the sick folks. Quoting Dr McWilliams:
“No matter one’s view on this debate, risk adjustment that only partially accounts for patient risk differences will effectively transfer resources from providers serving high-risk patients to those serving low-risk patients, whether providers bear the higher costs of improving quality for high-risk patients or incur the penalties from not doing so. Inadequate risk adjustment also establishes incentives for providers to attract lower-risk patients (favorable selection), diverting attention and resources away from improving the health of existing patients.”
A framework that compares your performance with that of every other doc across the country will certainly penalize those of you caring for “sicker” patients. As nephrologists we could certainly find ourselves on the short end of this stick.
Better or worse?
I will be the first to admit that MACRA has its flaws, and I think it truly represents a once-in-a-generation change that will impact practically every physician in the country. But the question under consideration today is, are we better off with MIPS and Advanced APMs? Or was the SGR and exposure to multiple CMS incentive programs a better hand to be dealt? I think the answer to this question may need to wait until we have a few years of MIPS under our belt. I applaud Dr McWilliam’s perspective and encourage you to have a look at what he has written.
As we honor those who have served our country and we prepare for the unofficial beginning of summer, I ask you this, is MACRA the lesser of 2 evils? Drop us a comment and let us know what you think. And from all of us at the Acumen blog, have a safe and enjoyable Memorial Day.
Terry Ketchersid, MD, MBA, practiced nephrology for 15 years before spending the past seven years at Acumen focused on the Health IT needs of nephrologists. He currently holds the position of Chief Medical Officer for the Integrated Care Group at Fresenius Medical Care North America where he leverages his passion for Health IT to problem solve the coordination of care for the complex patient population served by the enterprise.
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