June 27, 2017: MGMA comments on Better Care Reconciliation Act

June 27, 2017

The Honorable Mitch McConnell
Majority Leader
United States Senate
Washington, D.C. 20510

The Honorable Chuck Schumer
Minority Leader
United States Senate
Washington D.C. 20510

Dear Majority Leader McConnell and Minority Leader Schumer:

The Medical Group Management Association (MGMA) agrees that much can be done to improve our nation’s ailing healthcare system. However, we cannot support the Better Care Reconciliation Act (BCRA) as currently drafted in the U.S. Senate. The BCRA fails to address the most pressing ACA problems such as rapidly increasing premiums, high deductibles, and declining competition. At the same time, it introduces significant new risks for medical practices in an effort to cap federal funding for Medicaid.

In March, MGMA representing more than 40,000 medical practice administrators, executives, and leaders and 18,000 organizations of all sizes, types, structures and specialties, shared our core principles for healthcare reform with Congressional leadership. As Congress considers legislation that impacts the policies or financial underpinnings of the ACA, it should above all, minimize disruptions to the nation’s healthcare delivery and payment system. Based on our review of the legislation, we do not see how the BCRA improves the U.S. healthcare system in a manner consistent with our Association’s principles:

• Ensure continuity of patient care and meaningful coverage. Affordable health insurance that allows for continuity of patient care and coverage should be at the core of any healthcare reform. Our healthcare system must enhance the ability of medical group practices to provide high-quality, costeffective care to the millions of patients they serve.
• Patient choice, transparency, and appropriate provider reimbursement. The proliferation of narrow, often opaque provider networks coupled with reduced payments for participating providers is counter to an open and effective healthcare system. Health plans should be subject to the highest levels of state and federal accountability for fair business practices and required to provide standardized language to explain insurance coverage to patients. Any reform should ensure patients have access to the physicians and medical group practices of their choice and promote appropriate reimbursement for care provided.
• Reduce costly administrative and regulatory burdens that detract from patient care. To ensure the viability of our healthcare system, we must make a national commitment to administrative simplification, reducing regulatory burden, and promoting efficient automated processes.
• Leverage the group practice model to advance physician led reforms. Medical group practices represent a unique and effective care delivery approach that promotes care coordination and efficient, high-quality patient care. Excessive costs associated with care delivered in high-cost facilities drive up healthcare expenses for all. To achieve true system savings, patients should be incentivized to use the most appropriate, cost-effective clinical setting, such as medical group practices. Any reform should leverage the proven group practice model in developing new payment and care delivery systems.
• Enact medical liability reform. Liability reform is critical to the healthcare system. Defensive medicine and liability insurance premiums are significant drivers of healthcare costs. Legislation that seeks to improve healthcare must include meaningful liability reform.
• Minimize disruption when implementing reform. It is imperative that implementation of any health system reforms allow ample time for the healthcare industry to implement necessary changes to business and care delivery processes to minimize costly disruptions to patients and medical group practices.

Robust competition is key to stabilizing the healthcare marketplace. Two of the most daunting challenges presented to medical groups from the ACA were the proliferation of high deductible insurance products and narrow health plan provider networks. Per the recent CBO score of BCRA, after an initial upward spike, insurance premiums may decrease beginning in 2020, but only because the benchmark plan under the legislation would have an actuarial value of 58 percent beginning in 2020, down from the 70 percent under current law. This is below the actuarial value of 60 percent for “bronze” plans currently offered in the marketplaces. Lowering this standard will result in insurance products with even higher copays and deductibles.

Under current law for a single policyholder in 2017, the average deductible (for medical and drug expenses combined) is about $6,000 for a bronze plan. CBO expects the benchmark plans under this legislation would have deductibles similar to or higher than those for the bronze plans offered under current law. Patients retaining coverage under BCRA will essentially remain “cash paying", for which financial transactions and basic cost-sharing collections from medical practices will become increasingly difficult. To keep premiums low, provider networks have the potential to further narrow, hampering physician referrals and reducing provider reimbursement. Ultimately this will impact patient access to high quality care.

MGMA is particularly concerned with BCRA provisions to convert the Medicaid program into a system that limits federal financial support to a predetermined formula based on per-capita-caps. Per-capita-caps fail to take into account healthcare innovation and artificially limit the growth of Medicaid expenditures below the rate of medical inflation. These caps are reminiscent of the now repealed Medicare SGR formula and threaten provider reimbursement and patient access in an already problematic Medicaid system that frequently fails to cover even the basic costs incurred by medical groups in providing care to the nation’s most vulnerable citizens.

Finally, but no less important from a business standpoint, BCRA represents a missed opportunity for Congress to support business-friendly policies to reduce the excessive administrative burden faced by medical group practices in our healthcare system today. With approximately 15 percent of healthcare expenditures going toward administrative costs because of non-standardization processes and delivery system inefficiencies, much can still be done.

Understanding there are limitations on what may be considered during the budget reconciliation process, we urge Congress and the Administration to work with MGMA and other stakeholders so we may provide constructive input on healthcare reform, from the perspective of those impacted. Transparency and open discussion are critical to ensuring any healthcare reform legislation meets the principles outlined by MGMA in this letter.

As the voice for the country’s medical group practices, MGMA remains committed to promoting policies that enhance the ability of our members to provide high-quality, cost-effective care to the millions of patients they serve. Should you have any questions, please contact Anders Gilberg, Senior Vice President, Government Affairs at agilberg@mgma.org or 202-293-3450.

Sincerely,
Halee Fischer-Wright, MD, MMM, FAAP, CMPE
President and CEO