Outside factors that have impacted the viability of private practices have been well documented over the past several years. Recently, the Medical Group Management Association (MGMA) submitted a formal Statement to the Ways and Means Subcommittee on Health captioned “The Collapse of Private Practice – Examining the Challenges Facing Independent Medicine.” What are the indicators for the healthcare industry?
Issues facing private practice
In the statement, MGMA indicated that: “Independent practices are vital to the communities they serve yet are rapidly becoming extinct.” MGMA cited various issues including — cuts to Medicare reimbursement, staffing shortages, administrative burdens, cyberattacks, inflation and the lingering effects of the pandemic as contributing factors to the demise of private practice. 
As an example, MGMA noted that over the past few years physician practices have dealt with an increase of total operating costs of over 63% while Medicare adjusted reimbursement increased by less than 2% over the same time period. As we have noted previously, that environment has caused independent medical groups to evaluate the sale of their practices to hospitals and more recently private equity groups.
Actions to help private practice
MGMA has advised the Subcommittee that drastic and prompt action is necessary to allow independent practices to survive and provide high-quality care to their communities. Recommendations include:
- Providing an annual inflation-based physician payment update to Medicare.
- Making appropriate changes to the Merit-based Incentive Payment System (MIPS).
- Reducing administrative burdens including, very specifically, the requirement for securing prior authorizations. Nearly all physician medical groups identified prior authorization requirements as the most challenging and burdensome obstacle to running a practice and delivering high-quality care. That requirement also impacts related manpower issues.
- Establishing guidelines to address physician shortages by increasing funding to Graduate Medical Education (GME) programs.
Legal and advisory support for private practice
MGMA urged the Subcommittee and Congress to seriously evaluate this growing concern and take appropriate steps to protect independent practices.
FLB’s healthcare attorneys in Allentown, PA remain connected to the topics that impact our clients and the industry. We’ll continue to monitor this situation and share information on how the government may respond.
