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WASHINGTON -- The physician payment system instituted under the Medicare Access and CHIP Reauthorization Act (MACRA) has brought some positive results but still needs to be improved, witnesses said Thursday at a House of Representatives hearing.

"Despite the good intentions of policymakers, MACRA has not solved the issues with how Medicare pays doctors," Joe Albanese, policy analyst at the Paragon Health Institute, said at a to assess how successful the law has been. In addition, "MACRAs' value-based care programs have not significantly improved the quality of healthcare services."

Albanese outlined the two "tracks" of the Quality Payment Program implemented under MACRA: Under the first track, the Merit-based Incentive Payment System (MIPS), participating clinicians receive rewards or penalties based on their performance. Under the second track, clinicians receive annual bonuses for participating in certain types of alternative payment models (APMs). Unfortunately, he said, the Quality Payment Program has been disappointing on both fronts.

Under MIPS, for instance, physicians can choose which quality indicators they report on, "which allows them to hide poor performance," said Albanese. In addition, the program's complicated reporting requirements "have been administratively costly, particularly for small practices."

APMs have also been disappointing, he said, noting that the Center for Medicare and Medicaid Innovation "has found that only six out of its more than 50 APMs have yielded net savings, and only two of those have seen significant quality improvements."

Michael McWilliams, MD, professor of healthcare policy at Harvard Medical School in Boston, offered some possible solutions to MACRA's problems. He advocated extending the bonus currently being offered to doctors who participate in certain types of APMs; that bonus is set to expire at the end of the year. "I believe the APM bonus should be extended, but also restructured to be more effective," he said.

In addition, "MIPS has been a costly failure. In fact, I don't recall a more uniformly and resoundingly critiqued payment policy in my career. Many, including MedPAC [the Medicare Payment Assessment Commission], have called for its elimination and I agree with that recommendation," he added.

McWilliams also said that "other strategies to support high-quality care should be prioritized. These include building better data systems to support providers and promoting competition."

Aisha Pittman, senior vice president of the National Association of ACOs (NAACOS), a trade group representing a type of APM known as an accountable care organization (ACO), also praised the incentive payments, which she said that practices use for innovating patient care.

"One of the great examples that I've heard from a practice that is part of [NAACOS] is they created this thing they call the 'BATphone' -- the 'Before All That' phone," she said. "It's a 24/7 line that goes directly to someone in the practice. Instead of seeking emergency care, they ask all of the members in their practice to just call the BATphone."

The BATphone has been incredibly successful, "but it requires additional staff time to answer the phone," Pittman said. "So in the absence of having these incentive payments, they wouldn't be able to do that."

The ACO model, because it works based on total cost of care, allows practices to shift resources to where they're needed, Pittman said. For example, practices in rural areas rely heavily on telehealth. Even before the telehealth payment flexibilities implemented during the COVID-19 public health emergency, "there was a waiver that was allowed in ACOs," she said. "We think this is one of those non-financial incentives that brings more providers to alternative payment models because they're able to take advantage of those benefits."

Rep. Michael Burgess, MD (R-Texas), lamented the fact that certain parts of MACRA have been ignored, including the Physician-Focused Payment Model Technical Advisory Committee (PTAC), which was included in the law to help advise the Medicare program on the adoption of APMs. "PTAC unfortunately, has been absolutely ignored by the agency," he said. "But clearly Congress saw a role for PTAC when it created MACRA, and I think we're making a mistake by not encouraging that and utilizing that expertise."

Other committee members also expressed concerns about the larger Medicare physician payment system. "The MIPS program is budget-neutral," said Rep. Larry Bucshon, MD (R-Ind.). "What I mean by that is, whoever gets bonuses, you have to have people getting cuts." And this is happening at a time when Medicare payments are not keeping up with inflation, which means doctors' pay is essentially being cut, he said.

"This has helped lead to the morale amongst providers being extremely low," said Bucshon. "I talked to doctors who I have known for decades, and the burnout is high. We're losing quality people, particularly in rural America."

Rep. Raul Ruiz, MD (D-Calif.), also addressed the pay decrease. "If you take into account inflation and medical practice, payments to doctors have declined 26% between 2001 and 2023," he said. "This makes it difficult for small, rural, and low-income-serving physician practices to keep their doors open, further exacerbating the existing physician shortages and leading providers to turn away Medicare patients."

Ruiz and Bucshon are among four chief sponsors of the , which would give doctors an automatic annual pay increase, with the percentage based on the Medicare Economic Index.

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