Legislation could widen coverage gaps
Because of its bi-partisan roots, it seems safe to assume MACRA (The Medicare Access and CHIP Reauthorization Act of 2015) is here to stay… at least for the foreseeable future. This means physicians who treat Medicare patients have to figure out how their income will be affected by the act’s 2171 pages of legislative lingo.
Complexity is inevitable as MACRA folds together four major factors to determine compensation:
- Moving from fee-for-service to value or outcomes-based compensation
- Increasing the meaningful use of technology
- Improving clinical practices
- Cost effective resource use
In July, Deloitte reported that only half of the physicians it surveyed understood how MACRA would impact their income. While it is likely this number has since shifted, no one is talking about the consequences this increased complexity will have on how physicians protect their income.
For example, if a physician is part of an ACO, a significant increase in income, on a physician-by-physician basis could occur. MSSP (Medical Shared Savings Program) lump sum payments plus as much as a 5% upward payment adjustment (in 2019) from MACRA could easily out pace the terms of your current disability policy… that is if your income hasn’t or isn’t already outpacing the coverage you have.
Keeping things simple, the impact of MACRA provides a great opportunity to point out that the majority of the disability income coverage purchased for physicians in groups of five or more is in the form of what are called 60/10 policies. These cover up to 60% of your income to a maximum of $10,000 per month. That means a physician earning $250,000 per year would receive less than half of his or her income in the event of a disability.
What to do? Well, the first step is to know where you stand and how much coverage you have. I can provide a quick and easy disability income protection review for physicians who are part of an ACO, hospital system or standalone group. The review will give you a complete understanding of what you have, what is available, and what makes the most sense for your group.
If it is appropriate, your group may consider purchasing supplemental coverage in the form of a guaranteed issue policy. These policies provide individual doctors with as much as $40,000 of monthly income in the event of a disability. While these are available to individual doctors, purchasing them as part of a group typically eliminates the need for an extensive underwriting process and the hassle that goes along with it.
So, no matter how MACRA impacts your compensation, if you suspect your disability coverage is inadequate, and if you wish explore the options available for enhancing your protection, send me an email or give me a call.
Agent On the Record is my personal opinion column. My goal is to provide you with useful, interesting and timely information that will help you succeed in the increasingly complex world of risk and insurance.
My views do not necessarily reflect the views of HealthSure, my employer.
I welcome your feedback, questions and ideas.
Eric Boudinet
This communication is designed to provide a summary of significant developments to our clients. Information presented is based on known provisions. Additional facts and information or future developments may affect the subjects addressed. It is intended to be informational and does not constitute legal advice regarding any specific situation. Plan sponsors should consult and rely on their attorneys for legal advice.
