MACRA could reduce CMS physician services spending by $35B to $106B: 5 key trends

A new study published in Health Affairs examines how the Medicare Access and CHIP Reauthorization Act could impact physician payments.

MACRA went into effect after Congress repealed the sustainable growth rate formula for calculating physician payments for Medicare services in 2015. MACRA created a two-track performance-based payment system and promotes alternative payment models, which could have a huge impact on payment going forward.

The researchers sought to simulate the impact using the RAND Corp. Health Care Payment and Delivery Simulation Model.

Here are five things to know:

1. The study authors estimate MACRA will cause a $35 billion to $106 billion drop in Medicare spending for physician services. The drop will be 2.3 percent to 7.1 percent of what Medicare currently pays physicians.

2. MACRA could mean a 0.7 percent increase to 5.1 percent decrease in hospital service payments, which would add as much as $32 billion or drop as much as $250 billion.

3. Even as MACRA encourages alternative payment models, the study projections "underscore the impact of legislated payment rate updates."

4. MACRA could fare better than the SGR if organized medicine and physicians redesign business models around value and alternative payment models are well-designed and implemented appropriately.

5. The study authors predicted that if MACRA isn't rolled out and implemented correctly, legislators will need to make changes to Medicare payment policy again in the coming years, with 2025 as a pivotal year going forward.

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