Medicare Physician Payment: Why It ’s Still A Problem, And What To Do Now

When the Medicare Access and CHIP Reauthorization Act (MACRA) passed Congress in 2015, most people felt it was better than the old “Sustainable Growth Rate” (SGR) approach to setting physician Medicare fees that had been in place for more than a decade. After all, MACRA avoided what was to be a double digit reduction in Medicare physician payment rates in 2015. Instead, the new legislation provides five years of a 0.5 percent payment rate update, followed by five years of no increase (but also no decrease) in the payment rate. In addition, beginning in 2019, physicians will be able to pick from two novel payment approaches meant to reward providers delivering high-value care. MACRA is indeed better than what came before, but it still leaves in place perverse incentives that threaten to undermine quality and access for Medicare beneficiaries. Below we describe what we have accomplished regarding Medicare physician payment and what still needs to be done under the new administration and Congress. The Unhappy Pre-MACRA Trends While there are many articles commenting on MACRA’s pros and cons, there is little mention of the impact of past Medicare payment policy on physicians. Exhibit 1 begins in 2001 (the year before the SGR formulas led to a 5.4 percent reduction in the Medicare physician payment rate) and shows, for the years 2001 – 2014, the annual cumulative percent change in: The Medicare Conversion Factor (i.e., change in the payment rate); The Consumer Price Index...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Featured Medicaid and CHIP Medicare Payment Policy Quality MACRA Physicians Source Type: blogs