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MACRA rules for physician payments stacked against small practices, critics say

About 346,000 physicians, mostly in practices that have between one and 24 members, could see penalties.

Jeff Lagasse, Associate Editor

Proposed regulations released last week by the Centers for Medicare and Medicaid Services are raising concerns that the playing field is uneven, with 87 percent of solo practitioners getting penalized and 81 percent of clinicians in large groups earning bonuses, according to some estimates.

The new proposal includes a compensation formula for Medicare that gives performance bonuses as high as 4 percent to about 412,000 physicians and other clinicians in 2019, according to published reports. But there will also be penalties on an additional 346,000, mostly in practices that have between one and 24 members.

[Also: HHS proposes streamlined rules for how Medicare pays physicians, formally replaces meaningful use]

Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said in an interview with Medscape Medical News that the disparity is "concerning," saying physicians should be given the chance to succeed regardless of practice size.

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The proposal is essentially an adjunct to the Medicare Access and CHIP Reauthorization Act, a 2015 law that abolished the sustainable growth rate formula for physician compensation. MACRA gradually shifts reimbursement from fee-for-service to a more value-based model.

Most physicians will initially be beholden to the default payment model, the Merit-Based Incentive Payment System, which incorporates three existing Medicare incentive programs: meaningful use of electronic health records, the Physician Quality Reporting System, and the Value-Based Payment Modifier.

[Also: Breaking down the Medicare physician payment changes for doctors under MACRA]

Medicare will increase or decrease a physician's fee-for-service reimbursement in MIPS based on a number of factors, such as quality of care, cost and meaningful use of electronic health records (now called "advancing care information"), reports say.

In the Medscape report, Gilberg estimated the finalized version of the proposal will be released in the fall, giving physicians only a few months to master MIPS rules for the performance year of 2017, which will determine whether they get a bonus or a penalty in 2019.

The 4 percent bonuses and penalties will be enacted in 2019, increasing to 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022 and beyond. The bonuses are based on the performance of two years prior.

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Clinicians are exempt from MIPS if they elect to participate in an alternative payment model, reports say, with participants receiving lump sum incentive payments equal to 5 percent of their Medicare Part B revenue the year before.That also begins in 2019.

CMS said only APMs deemed "advanced" will qualify for incentive payments, and the physicians participating in them accept serious downside risk in their quest for bonus money, the agency said.

The agency estimates in its proposed regulations that between 31,000 and 90,000 clinicians in 2019 will qualify for bonuses of $146 million and $429 million, respectively, as part of advanced APMs. The agency expects the number of clinicians who qualify to increase over time.

CMS proposes to exclude clinicians newly enrolled in Medicare, clinicians with a very low volume of Medicare patients and revenue, and clinicians in so-called ineligible specialties such as audiology and physical therapy.

Twitter: @JELagasse