RED HOT Contributors


Hospitals could lose $250B from MACRA, study finds

CREDIT: This post was originally published on this site

Dive Brief:

  • A new study in Health Affairs found that Medicare hospital reimbursement could decrease $250 billion – or could even increase by $32 billion depending on the modelover a 15-year period under MACRA.

  • The researchers projected Medicare payment policy from 2015 to 2030 under four scenarios and found hospitals could take a financial hit as physicians get used to the different value-based payment model, which will likely cut hospital admissions and re-admissions.

  • Slated to take effect in 2019, MACRA will move Medicare payments from a fee-for-service to a value-based model. MACRA will eliminate the sustained growth formula and replace it with a .5% annual rate increase through 2019, which is when physicians will be encouraged to shift to one of two Quality Payment Programs: Merit-Based Incentive Payment System (MIPS) or an APM. Proponents of MACRA see it as a way to stabilize the Medicare reimbursement system.

Dive Insight:

MACRA is coming and is expected to affect more than 500,000 clinicians. Though the value-based payment model is two years away, it’s not too early to start planning. Performance data for this year, which is seen as a transition year, will be used to affect 2019 payments. Physicians and hospitals need to start planning ahead and think about how this model may affect them.

For MACRA to work, the payment system needs two things to happen – “organized medicine,” including physicians, must accept that they are “responsible stewards of society’s resources and redesign their business model around value” and alternative payment models (APMs) must be well designed and implemented.

Researchers in the study offered some words of warning about MACRA regarding industry buy-in and program payment design. If either one is lacking, MACRA may not control costs, could harm healthcare delivery, and may cause the CMS to look to try a different Medicare payment reform down the road. “If successful APMs are not available to physicians, there could be unintended consequences for patients, and one of the key goals of MACRA will be missed. If these conditions are not met, then in coming years (2025 is a key year to watch), changes to Medicare payment policy will again be at the top of the federal health policy legislative agenda,” the authors wrote.

There is still a chance to be heard on one aspect of the value-based payment model. The CMS is taking feedback until June 30 on physician grades and what measures could improve health outcomes, patient engagement, and safety.

Filed Under: Hospital Administration Policy & Regulation


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