14 Apr 2015 Another Reason to Oppose the Medicare Doc Fix Bill

I’m trying really hard to support the “Medicare Access and CHIP Reauthorization Act” (MACR).

Yesterday, I pointed out that it included a new Medicare payment system called the Medicare Incentive-Based Payment System (MIPS) that will incentivize physicians to avoid the sickest patients.  I concluded:

One of the goals of MACR, eliminating the unworkable Sustainable Growth Rate, is a worthy one. Getting rid of this perennial problem, however, should not come by way of a new payment system that will make it harder for sicker patients to obtain physician care. The Senate should remove MIPS. Otherwise, lawmakers risk installing an IPAB-style payment system in Medicare.

Unfortunately, the bill also contains an incentive under Medicare to encourage physicians to join accountable care organizations (ACOs).  For those of you who are unaware, an ACO is a relatively large group of physicians and other health care providers that are responsible for a group of patients.  If this sounds like bureacratic medicine, it is.  It’s not clear that ACOs are working as intended, and there is also evidence that smaller physician practices may be better for patients.

Nevertheless, Republicans have included in MACR a 0.75 Medicare payment increase for physicians who join an ACO and 0.25 percent increase for those who don’t.  (Those who don’t join will also be subject to the MIPS system).

Here’s the kicker: ACOs were the creation of ObamaCare.

This leads to two questions:  First, why would Republicans be reinforcing a component of ObamaCare, especially one that incentivizes bureaucratic medicine?  Second, what were Republicans thinking when they drafted this bill?  (“They weren’t thinking!” —the Wife.)

At the very least, the Senate needs to remove MIPS.  MIPS imposes a penalty on physicians who don’t meet certain benchmarks.  Without that, there is less incentive for physicians to join an ACO.

I’m reluctantly willing to let slide the $147 billion increase in costs over ten years that MACR entails, as there is a decent case to be made that the other changes this bill makes to Medicare will generate savings over the much longer term.

I would so love to see the Sustainable Growth Rate (SGR) be repealed.  As I’ve argued elsewhere, it probably isn’t good for Medicare patients either as it incentivizes physicians to see fewer Medicare patients.  But with both MIPS and the ACO incentives in this bill—forget it!  Those costs are greater than the benefits of repealing the SGR.

Either remove MIPS or scrap this piece of junk and start over.