The Final Rule

By Kip Sullivan, JD
The Health Care Blog, October 19, 2016

I have read a substantial portion of CMS’s final rule, published last Friday. It is clear to me CMS intends to implement its original rule with only minor changes. I predict the implementation process will be a nightmare.

The most fundamental problem with the rule is its insane complexity. The complexity is a function of both the complexity of medicine and the impossibility of what Congress has asked CMS to do – to measure the cost and quality of physician services at both the individual and group level and to punish and reward doctors based on inaccurate scores, and to oversee the creation of vaguely defined and unproven entities like ACOs and “medical homes” which will also dish out penalties and rewards based on inaccurate data.

Implementing such a monstrously complex law, or even portions of it, would be very difficult even for an agency run by clear thinkers. But CMS is not run by clear thinkers. It is run by people who think like employees of advertising agencies. They think their job is to persuade their listeners that their product is wonderful. They think they are supposed to exaggerate what MACRA will do, and to deny or obfuscate MACRA’s obvious defects.

CMS committed both types of errors – exaggeration and denial – in its first rule, and it committed identical errors in the final rule. At this point I think it’s reasonable to predict that CMS won’t admit either type of error until long after implementation has begun and reality has repeatedly smashed its staff over the head. Of course, by then much time and money will have been wasted, and many patients may have been harmed as well.

I’ll devote the rest of this essay to examining the worst examples of both types of errors – hyping that which should not be hyped, and overlooking that which should not be overlooked. I will close with a comment on how similar MACRA and the Affordable Care Act are. Both laws are already in trouble because they rely on the same bankrupt theory of cost-containment. Their troubles have only just begun.

Republicans and Democrats share the blame for the MACRA mess

In this post I have aimed my criticism at CMS for approaching MACRA with the mindset of a PR agent. CMS deserves harsh criticism because they are not being forthright, and in some cases they have been downright dishonest. [1] CMS’s unwillingness to tell the truth about MACRA does not bode well for its implementation and the ensuing public debate.

But the ultimate blame for MACRA’s nightmarish complexity falls on Congress. Democrats and Republicans voted overwhelmingly for MACRA. How quickly we resolve the mess created by MACRA will depend ultimately on how quickly leaders of both parties understand MACRA’s defects. If both parties engage in some honest introspection, they will at some point realize both parties have subscribed to the same bankrupt theory of cost containment.…

As Kip Sullivan explains, MACRA is bringing us considerable administrative complexity and grief without evidence that it will achieve its goal of containing costs while improving quality. You may want to use the link above to read the rest of his article, including the footnote on CMS not being forthright.

Although MACRA did have strong bipartisan support in Congress, that support was not based on the merits of MIPS (merit-based incentive payment system) and APMs (alternative payment models including ACOs). Rather the support was based on bringing an end to the flawed SGR Medicare payment system that had plagued Congress for a couple of decades. MIPS and APMs were included as a seemingly benign replacement for SGR (sustainable growth rate). It was not benign, as some of us protested, but we were ignored largely for political reasons, as described by Kip Sullivan.

Besides being a flawed model of cost containment, MACRA will absorb much of the energy in health care reform, delaying for perhaps decades a serious consideration of a model of reform that has already been proven to contain costs while improving access and quality and ensuring universality – a single payer national health program. What a shame.