MGMA Survey Report: Regulatory Burdens Alarm Medical Practices

About 90% of survey respondents report that regulatory burdens have increased over the past year.

The coronavirus pandemic has increased the regulatory burdens on medical practices, according to a new survey report from the Medical Group Management Association (MGMA).

Regulatory burden has been a top concern at medical practices for years. The "Annual Regulatory Burden Report" published this week by the MGMA highlights the pain points medical practices are feeling this year.

The survey report has responses from executives representing more than 400 group practices. More than 80% of the survey respondents work at independent practices.

The survey report features several key findings.

• 91% of survey respondents said the overall regulatory burden on their medical practice over the past year has increased
   
• When asked which regulatory issue was very or extremely burdensome, the Top 3 issues were prior authorization (88% of survey respondents), COVID-19 workplace mandates (71%), and Medicare quality payment programs (71%)
   
• 92% of survey respondents said healthcare consolidation such as acquisitions of physician practices by health systems and hospitals is increasing
   
• 72% of survey respondents said consolidation is having a negative overall impact on the U.S. healthcare system
   
• 75% of survey respondents said regulatory requirements are a significant driver of healthcare consolidation
   
• 79% of survey respondents said the move toward value-based payments for Medicare and Medicaid patients has increased the regulatory burden on their practices
   
• 70% of survey respondents said the move toward value-based payments for Medicare and Medicaid patients has not improved the quality of care
   
• 70% of survey respondents said the move toward paying physicians based on value has not been successful so far
   
• 93% of survey respondents said the positive payment adjustments of Medicare's Merit-based Incentive Payment System (MIPS) do not cover the costs of time and resources spent preparing for and reporting under the program
   
• 80% of survey respondents said that Medicare does not offer an Advanced Alternative Payment Model that is clinically relevant to their practices

Interpreting the data

The pandemic has worsened the regulatory burdens on medical groups, says Anders Gilberg, MGA, senior vice president of government affairs at MGMA.

"Particularly early in the pandemic, it impacted the revenue of medical groups significantly. There was a drop of about 50% across the board in revenues in the early months of the pandemic. Revenue has bounced back but there was a shock to the system at medical groups. So early in the pandemic, it created a situation where the regulatory burden was still high, but practices were forced to furlough staff and lay off staff because they simply did not have patients coming in for visits. This put a strain on practices to keep up with regulatory burdens," he says.

This year, vaccine mandates have created new staffing shortages at medical groups, Gilberg says.

"There are still underlying staffing issues, but we are finding ramifications in 2021 from state mandates and vaccine mandates affecting practices. This is especially true in states where there is hesitancy about getting the coronavirus vaccine. Practices that are attempting to implement vaccine mandates are losing staff. On the administrative side, employees in some of the lower paying positions such as billing are making the choice to leave healthcare—they can find similar jobs outside of healthcare that do not have vaccine mandates. In addition, there is a large percentage of nurses who have been reluctant to get vaccinated, so practices have been losing staff on the clinical side as well."

The latest wave of staffing shortages is heightening regulatory burdens, he says.

"When you do not have administrative staff or clinical staff to process bills or to take care of patients, we are hearing frustration about the growing regulatory burden coupled with not having enough staff members to report quality measures, which practices do not feel are relevant. There are not enough staff members to sit on the phone with payers to administer prior authorizations. There is a confluence of events where the regulatory burden continues to grow, while the resources that medical groups have are shrinking. That is putting an incredible strain on medical groups."

Prior authorization is the most costly and time consuming regulatory burden at medical practices, Gilberg says. "When practices do not have the clinical staff to administer prior authorizations or when physicians are pulled out of direct patient care to authorize care, it creates significant strain on the practice in terms of time, resources, and finances. When you cannot be productive as a physician because you are on the phone with payers, it stresses a practice."

Many prior authorizations are unnecessary burdens, he says. "There are many services that require prior authorizations that are routinely approved, yet you still must jump through the hoops to get these services approved. That creates an unnecessary burden. There are also medical groups that are in value-based payment arrangements, where they are held accountable for cost and quality. In those arrangements, practices are already doing what they can to address the underlying issues that prior authorization also seeks to address."

Regulatory burdens are a significant factor in healthcare consolidation such as the acquisition of medical groups by health systems, hospitals, and other larger organizations, Gilberg says. "Especially in an environment where we have had a shock from the pandemic, which has affected the finances of independent practices as well as the staffing of independent practices, medical practices do not have the finances or the staffing to deal with growing regulatory burdens. As a result, the physicians who own independent practices think about getting someone else to deal with the regulatory burden."

Many medical groups feel trapped in the MIPS program, he says. "MIPS is a quality reporting program that was largely meant to be a bridge as Medicare and the Center for Medicare and Medicaid Innovation created new opportunities for physician to avail themselves of Alternative Payment Models. What we have seen is that many practices are stuck in the MIPS program. In our new survey report, most practices do not find that many of the Alternative Payment Models that are in the Medicare program are clinically relevant to their practices."

More Alternative Payment Models should be launched, Gilberg says. "We are looking for more Alternative Payment Models so we can move more practices out of the MIPS program. We need more Alternative Payment Models so we can create a win-win for value-based care. Many of our practices are optimistic about value-based care, and they would be interested in participating if there were programs that could help them both financially and clinically. But many practices do not have that opportunity. That's why the MIPS program rises to the top of our regulatory burden survey."