Small physician practices around the country are coming under increasing pressure to the point where they are joining larger groups, joining hospital staffs, or simply disappearing. The struggle to survive is based on a 2015 law that dictates how Medicare pays physicians.

The Medicare Access & CHIP Reauthorization Act – MACRA was an attempt to change the health care system so that it rewarded quality service over mere quantity. MACRA replaces the old reimbursement system that doctors never liked. With wasteful spending accounting for up to a third of the entire health care budget, a change from the current system is welcome. However, it does come with some risks.

How MACRA Works

The new law sets up two different payment systems of which physicians must choose one. The first is for doctors who exceed quality of care standards and offers up to a 4% bonus on Medicare reimbursements. This will go up to 9% by 2022. Physicians who score under the set standards will face penalties on a similar level.

The other method is known as “alternative payment models” where the quality of care is determined by the doctor in the organization itself. By joining this program, doctors may receive a 5% annual bonus from 2019 up to 2024. 2026 onwards, doctor in the organizations will continue to get payment adjustments.

The intent by Congress is to push all doctors into larger organizations because the perception is that they deliver better health care at a lower cost. This is because they have more resources at their disposal, better revenue cycle management practices, and their expense can be somewhat mitigated by seeing a larger number of patients. However, the concern is that it means the end of small practices consisting of one or two doctors.

The Future of MACRA

Another issue is that it would penalize doctors for limiting the number of Medicare patients that they see or dropping Medicare altogether. Plus, it may harm practices that are located in rural areas that cannot support larger physician practices. For many physicians, they do not know what to do and may find themselves leaving rural areas to go into practice with larger organizations or join hospital staff in the cities.

In addition, the added burden of reporting physician care to the government is yet another layer of paperwork that may costs billions of dollars. With no current system in place, one will have to be created which means additional complexity which adds additional burdens to health care in general. It appears that making this law work will require considerable effort and input that may take years to fully realize.

There is little doubt that the Medicare Access & CHIP Reauthorization Act – MACRA is controversial in nature. It may also end small physician practices as we know it. However, the bill is still before Congress which means that it is being modified to address the concerns that many doctors have expressed. From taking care of their patients to revenue cycle management, it appears that MACRA will have a telling impact over the care of Medicare patients.