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New Medicare Pay Rules Threaten Small Practices, Doctors Say

By Kerry Young, CQ Roll Call

May 6, 2016 -- Many doctors fear that they will be forced to seek employment with larger medical groups and hospitals because of a congressionally mandated overhaul of Medicare's pay for physicians, according to initial comments on an agency draft rule.

Many physicians predict the proposed framework will create financial difficulties for those trying to maintain smaller practices, a view supported by Centers for Medicare and Medicaid Services' (CMS) own estimates. 

About 87 percent of doctors in solo practice could see reduced Medicare payments because they will fare poorly in metrics judging their performance next year, with about only 13 percent in line for higher pay. The numbers nearly flip for sites employing 100 or more doctors and other providers covered by the Medicare metrics, with 81 percent likely to get a "positive adjustment" in reimbursement, the agency estimated.

CMS is accepting comments on the draft rule, which was unveiled last month, through June 27. Congress required the changes in a law enacted last year (PL 114-10).

The overhaul of physician pay "is essentially taking money from small practices and shifting it to large ones," Randy Robinson of Iowa wrote in a comment to CMS on the rule.

CMS already has received several complaints about the expected impact of the reimbursement plan, known as the merit-based incentive payment system, or MIPS. Terry Burris of Ohio said that the proposed plan "will penalize the solo practitioners of this country, and continue to industrialize the practice of medicine." Wayne Glazier of Massachusetts told CMS in a comment that the proposed system of quality metrics "will force physicians into large hospital systems which will increase costs and ultimately the system will be more expensive, less efficient."

Some doctors said they support the principles behind the rule, including a bid to improve the practice of medicine by tying Medicare payments to quality judgments.

"I have no problem with the concept of being reimbursed based on quality, but it must be done in such a way not to harm small practices," Robinson said. "Remember we do not have large IT departments and the ability to hire expensive consultants to meet government regulations, it's just us. Like many solo physicians, I am my own IT guy and compliance officer."

The CMS officials charged with carrying out the law on the Medicare doctor pay overhaul face a significant challenge, according to John D. Halamka, chief information officer for Harvard's Beth Israel Deaconess Medical Center. Halamka summarized key provisions of the proposal, officially known as a notice of proposed rulemaking, in a Thursday post on his "Life as a Healthcare CIO" blog. The new rules will set metrics for 2017 performance, leaving doctors little time to prepare.

"The folks at CMS are very smart and well meaning, but it's hard for me to imagine implementing the NPRM as written in the timeframes suggested," Halamka wrote.

In his view, the myriad changes in the 962-page proposed rule are "so overwhelmingly complex, that no mere human will be able to understand them." Like several of the doctors who already have offered comments to CMS on the pay rule, Halamka in his blog suggested that the new pay rules will drive further consolidation in medical practice.

"This may sound cynical, but there are probably only two rational choices for clinicians going forward—become a salaried employee delivering clinical care or become a hospital-based clinician exempted from the madness," Halamka wrote.

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