| Physicians: Don’t Get Blindsided By MACRA
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Physicians: Don’t Get Blindsided By MACRA

Physicians: Don’t Get Blindsided By MACRA

We are all aware of the challenges and shortcomings of Obamacare. In a sign of things to come, President elect Donald Trump has nominated Rep. Tom Price to serve as Secretary of Health and Human Services and he is expected to lead the administration’s efforts to replace Obamacare. No one can predict Obamacare’s future, but it is clear that Trump intends to pursue a new direction for American healthcare.

While Obamacare has dominated the healthcare spotlight, there is another major piece of legislation which passed last year with overwhelming bipartisan support that will not be replaced.   The Medicare Access and CHIP Reauthorization Act, otherwise known as MACRA, has the potential to have a significant impact on medical practices and the future earnings of physicians. Surprisingly, many physicians are unfamiliar with the law and others are scrambling to meet its requirements.

MACRA replaces the current system of paying physicians under Medicare. It incorporates the same cost control mechanisms that existed under Obamacare and reinforces the presumption that the federal government understands how to efficiently manage the delivery and costs associated with quality healthcare. We believe this law will empower the federal bureaucracy at the expense of the patient-doctor relationship.

MACRA will use Medicare payment regulations as a wedge to force hospitals and physicians to change the way they treat patients and to comply with a dizzying array of new reporting requirements predictably embedded in a 2,000 page legislative behemoth. MACRA’s goal is to extract better value from healthcare by replacing traditional fee for service compensation with a risk based coordinated care model. Physicians who fail to comply with these incredibly complex requirements risk having their Medicare reimbursements cut significantly starting in 2019. It is also expected that the private payor insurance market will adopt many of the value based initiatives contained in MACRA.

While MACRA is clearly changing the healthcare landscape, malpractice insurance, a significant expense, will be affected as well. These changes will force some independent physicians to consolidate into larger groups, join ACO’s, or become employees of large healthcare organizations. Malpractice insurance will need to become more complex and will require physicians to leverage their buying power by exploring captives, risk retention groups, and other alternative risk structures that will significantly reduce and control future malpractice costs.

Time is of the essence to start preparing for the change as the first MACRA performance period starts in January 2017. As Mark Twain said, “The secret to getting ahead is getting started.”


Phalanx Healthcare Solutions is a New York based medical malpractice insurance consultant specializing in insurance and reinsurance solutions for physicians, physician organizations, and healthcare systems. For more information, visit our web site at www.phalanxllc.com.

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