New payment system could be demise of small physician practices

A new government payment system that will be phased in by 2019 could hasten the demise of small physician practices, health policy expert Robert A. Berenson, M.D., says in an interview with Medical Economics.

The Merit-based Incentive Payment System (MIPS) could put many small practices out of business because it will be an administrative burden and costly to gather the data required, says Berenson, a fellow at the Urban Institute in the District of Columbia.

However, physicians who don't participate in the MIPS program can lose as much as 9 percent of Medicare revenue automatically if they don't report physician performance data, he says. MIPS, part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), will replace the current Physician Quality Reporting System (PQRS). MIPS will adjust Medicare payments for most physicians up or down by as much as 9 percent depending on how they score in four performance categories. The program could be "the death knell of many small practices," he predicts.

Berenson told the publication that only about 50 percent of physicians in private practice currently submit data under PQRS because of the administrative burden and the fact that they don't think the measures are good ones, but they stand to lose only 2 percent of revenue. Under MIPs, with the potential to lose 9 percent, the stakes are higher. 

Another reason for concern: MIPS will focus on quality, resource use, clinical practice improvement activities and meaningful use of electronic health records systems. Small physician practices don't have the IT systems they need to collect and report this data, Berenson says. They would need to spend the money to hire a consultant to produce the data from their medical records or use a registry option the government is offering, which will also require resources. Many small practices will decide they can't afford to do that, he says.

While Berenson worries about the consequences of the MIPS program, Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt told a Senate Finance Committee last month that legislators may be "very pleased" with new proposed rules implementing the MACRA that will be released later this year.

To learn more:
- read the Medical Economics interview