Can U.S. Health Care Escape Macra's Bureaucratic Briar Patch?

NEW YORK, NY – From 1997 and 2015, Congress legislated 17 times to patch Medicare’s system of paying physicians,  which has driven up the cost of American health care by reimbursing medical providers for services, regardless of their value or quality. The 2015 Medicare and CHIP Reauthorization Act (MACRA), was supposed to permanently fix the system, but the regulatory apparatus it imposes on medical practitioners is so flawed that it is struggling to get off the ground. A new report by MI senior fellow Chris Pope argues that MACRA needs to be radically pared back, and Medicare Advantage embraced as a better vehicle for fundamental reform.

MACRA seeks to quantify the value of care delivered and to get medical practices to bear some responsibility for the aggregate costs associated with a course of treatment. To do so, as Pope documents, the law provides higher payments to clinicians who participate in Alternative Payment Models (APMs), in which practices are penalized for excessive aggregate costs associated with the delivery of a full course of treatment. Most medical practices have balked at APMs, which require them to bear substantial financial risks. These practices, however, will become subject to a complex grading mechanism, the Merit-based Incentive Payment System (MIPS), which will adjust Medicare payments to clinicians in line with their performance relative to peers on a vast array of performance metrics. Yet the federal agency tasked with overseeing this scoring system has publicly declared MIPS to be unworkable and called for its repeal.

The fact that Medicare has inadvertently encouraged the proliferation of low-value services does not mean that it is capable of transforming health care for good by quantifying and evaluating the merit of each service that is delivered. Rather, it should seek merely to avoid doing harm, by rewarding clinicians for treating patients enrolled in Medicare Advantage—which would eliminate the risk to taxpayers of inflated volumes of low-value services, while freeing medical practitioners from arbitrary and counterproductive regulations.

Click here to read the full report