Medicare payments won’t cover costs for many physician practices in 2019, poll finds

Medicine Money
The majority of physician practices don't expect Medicare reimbursement rates to cover the cost of providing care. (Getty/utah778)

Medicare reimbursement isn’t cutting it for many physician practices.

Some 67% of medical practices said that the Medicare payment rates for 2019 will not cover the cost of their delivering care to patients, according to an MGMA Stat poll.

In the poll conducted this month, only 16% of the 478 respondents said they expected their practice’s Medicare payment rates would be above what it costs to deliver care to beneficiaries, and only 17% said they expected the rates would be equal to covering their costs.

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More than two-thirds of practices, however, said they expected a shortfall, leaving many practices to rely on contracts with private insurance companies covering non-Medicare patients to offset their loss. “Medicare fee-for-service can’t be entirely abandoned. Below-cost rates coupled with limited APM [alternative payment model] opportunities won’t sustain the transition to value-based payment and will potentially impact access to care,” said Anders Gilberg, the Medical Group Management Association’s senior vice president for government affairs.

That’s true for anesthesia practices, where Medicare typically reimburses only about one-third that of commerical payers, said Brian Ramos, COO at Maryland-based Capital Anesthesia Partners, in a Twitter post reacting to the survey.

It also doesn’t bode well for practices under a Medicare-for-all healthcare system, he commented. “Physician practices can’t afford to provide services on a 'Medicare-for-all' reimbursement model,” Ramos said about the proposal put forth by some Democrats to expand Medicare.

While Medicare rates are lower, those patients often require more care. The Medicare “population is more complex, more sickly and has comorbidities that you don't see elsewhere. It takes more resources to manage their conditions,” said one of the survey respondents quoted in an MGMA commentary.

Under the payment system put in place by the Medicare Access and CHIP Reauthorization Act (MACRA), Medicare fee-for-service payments are not keeping up with inflation or the cost of running a physician practice, MGMA officials said.

"As medical practices transition toward a value-based payment environment, fee-for-service does not need to be abandoned entirely, but it does need to be updated appropriately," they wrote. "Even if a payment system provides the right incentives, if the underlying reimbursement rates are too low, the system is not sustainable for physicians to continue providing high-value care."

There are problems with both of the payment tracks created by MACRA.

Under the Merit-based Incentive Payment System (MIPS), the track by which most practices participate, even those with the highest performance scores only earned a 1.88% positive adjustment for the first year of the program—far less than the 22% originally talked about as the high range for possible payments. The program requires budget-neutral payments.

That left many physicians disheartened. At last fall’s MGMA annual conference, one official commented that those low MIPS payments left many physicians “feeling like it was just for nothing.”

And there’s a big problem with the other track, advanced alternative payment models (APMs). There aren’t enough of them.

Opportunities for doctors and physician practices to participate in advanced APMs remain stifled, according to the MGMA. There are only eight national advanced APMs in 2019 and options to join an APM are particularly limited for specialty providers, MGMA officials said.