President's Message 5/10/16
A year ago in April, 2015 Congress passed and the President signed the repeal of the SGR formula doctors have lived with for decades. SGR was never really enforced however, since each year Congress passed temporary delays in its implementation and kicked the can down the road. Medicare participating doctors did not usually get any rate increases, but at least the draconian rate cuts the SGR would have mandated were usually blocked. The permanent repeal of SGR was hailed by many as a great advance since it directed CMS to devise ways for doctors to get paid not by the visit, but by our results. However, it still mandated that the new procedures be "budget neutral", so there will have to be as many losers as winners. If patients were kept well and out of the hospital where the huge costs reside, doctors were to be paid more and paid less if not.
The new law is called the Medicare Access and CHIP Reauthorization Act (MACRA). If you want to read the law, it is not that long, here it is: https://www.congress.gov/bill/114th-congress/house-bill/2/text .Enjoy.
Trouble is there are lots of ways to implement such a plan. With Obama's CMS troops in charge of writing the new rules, the expected happened. CMS has written a 960 page rule, many times longer than the Act itself, that nobody likes. It will force doctors into large groups and ACOs because small organizations cannot possibly comply with its complex reporting regulations. It will kill insurance and Medicare payment based solo and small group practice which will be totally unable to comply and will lose 9% of its revenue for failing to do so. Such practices are already running on very narrow margins with 70% plus overheads and a 9% cut will put many of them out of business and force the rest into contractural arrangements with hospitals that protect them at the price of dictating what they do.
The real irony is that clearly, solo and small group practice are the practices that are currently doing the best job of keeping people out of the hospital and out of emergency rooms. Why on earth would Obama's CMS what to kill them. (In fact, they should be exempted from this law, and efforts are underway to make that exemption reality.)
The shortage of doctors will increase as more retire prematurely. As others take salaried jobs production and access will drop further since such employment arrangements always result in doctors behaving like employees rather than entrepreneurs, with a predictable loss of productivity.
There is a third option. Solo and small group doctors can do what we have done and form direct financial relationships with their patients in concierge practice and other forms of direct practice so the drastic cuts coming in the next few years will not affect them. Already the Affordable Care Act (Obamacare) has resulted in a massive increase in concierge and direct practice conversions, and that trend will accelerate.
Employees of large companies are now actively looking for concierge and direct practice access arranged by their employers, because in this brave new world since the passage of the ACA and now MACRA their deductibles and co-pays have soared so high that they might as well not have insurance at all. Furthermore, when they try to make an appointment with a physician there are higher and higher barriers to access delaying care, which essentially amounts to denied care. So, the emergency room has become the default location of care for millions. However, investing in membership in a concierge or direct practice once again gives them immediate and affordable access to care.
ACPP should be the organization that helps these new concierge and DP doctors improve and refine their practices, give them a voice in state and federal government, and provide them with a network of like minded physicians with whom to collaborate.
So, we hope to see all of you in September at our second annual ACPP meeting September 24-25 in Las Vegas. It will be a fabulous meeting with amazing speakers and networking opportunities. I hope to see you there.
Thomas W. LaGrelius, MD, FAAFP
310-717-7127 cell (I'll happily take your call, just please don't wake me up 11 pm-7 am Pacific time. It's also the same number my patients use to reach me).