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MGMA: Payment Uncertainty Dampens Physician Spending

 |  By jcantlupe@healthleadersmedia.com  
   October 24, 2012

A time of "massive flux" from payment uncertainty leaves physician practices in a reductionist mode these days, according to Medical Group Management Association - American College of Medical Practice Executives President Susan Turney, MD. She shared her observations with attendees at the MGMA-ACMPE conference in San Antonio, Texas this week.

Doctors are trying to avoid red ink by significantly delaying delivery on new equipment, reducing charity care, and trimming clinical staff, Turney says.




The grumbling about federal regulations and reimbursement cuts reverberated through San Antonio's  Henry B. Gonzalez Convention Center as physicians crowded into sessions about how they could "save time, see more patients and improve practice revenue" or get to the bottom line: "How much is my practice worth?"

One of the big concerns is a perennial: the "fiscal instability" created by what MGMA officials call the "decade" of Congressional reprieves from sustainable growth rate formula cuts.

Once again, MGMA-ACMPE officials are calling for the Obama Administration and Congress to repeal the SGR, which would impose a 27% cut in Medicare reimbursements to physicians. These cuts have been postponed repeatedly by Congress, but the funding needed for future payments will only increase dramatically over the years, as far as doctors see it.

 

But that's only part of the story, physician, hospital, and insurance leaders said at the three-day MGMA-ACMPE conference, which opened Sunday and ends Wednesday.

There are not only payment uncertainties, but also complicated questions as more physicians find hospital employment, and scurry to innovate their practices to stay in business, or rush to unload their practices, or try to get on with their lives. In the backdrop is peaking uncertainty over the presidential election.

"Everybody is clearly in massive flux," Turney says. "No matter what happens with the elections, we know the care model is going to change. We don't know what it's going to look like." One thing she's certain of: Care will be more "consumer-directed."

Sharing the stage Tuesday, Michael Funk, director of National Network Operations for Humana, Inc., based in Louisville, KY, reiterated what many in healthcare are observing across the country: "We have doctors buying doctors' practices, hospitals buying practices, health plans buying practices. There's a tremendous amount of chaos going on."

One of the major causes of chaos has been the SGR problem. During the conference, MGMA–ACMPE released a  study  that shows how physicians have been impacted by the uncertainty over SGR. Not only are physicians making changes to their individual practices, but they also are contemplating becoming involved in new Medicare payment and care delivery models outside of the fee-for-service model.

Physicians are fundamentally uncertain what to do next because of congressional inaction on the SGR, according to Turney. And because of this doubt, 60% of physicians have delayed the purchase of new clinical equipment or facilities; another 45% have reduced charity care, and 38% have reduced clinical staff, says Anders Gilberg, MGMA, senior VP for Government Affairs.

Physicians have made some "tough decisions' due to payment uncertainty, he adds.

As physicians look ahead, they are certainly willing to embrace new payment models or demonstrations, says Turney. The survey of 1,000 doctors shows that 18% of respondents indicated that they are currently participating in any of the Medicare new payment models and or demonstrations.

The 82% of physician practices not participating in a new model said they would be more likely to participate if they had five years of Medicare payment stability. To succeed, physicians need "stability through the transition" and "simple and relevant opportunities to participate and innovate," Gilberg told a group of journalists.

"Because the Medicare reimbursement cuts have been averted so many times in the past, practices aren't worried," Gilberg said. "It's not like the cuts will actually happen, right?"

And, he says, there are other "clouds on the horizon," including issues over ICD-10, privacy and security concerns, compliance questions over heightened government scrutiny, and ongoing healthcare reform implementation, he said.

But still, there's some reason for optimism. "There's more care coordination and better communication and data sharing," Gilberg says.

In a separate panel discussion, Richard Umbdenstock, FACHE, president and CEO of the American Hospital Association agreed. "We're seeing collaboration on a variety of levels and it's only going to continue to grow," he said, referring to providers and payers teaming up on cost-cutting and innovative programs.

Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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