In an article for Inside Health Policy, TRP Partner Shea McCarthy offered his take on where things stand regarding potential for Medicare physician pay reforms to advance in Congress later this year.
Given the ongoing challenges faced by physician practices due to the rising cost of doing business and workforce shortages, McCarthy suggested that Congress should seriously consider policies to increase pay for physician’s services. “While Congress provided some certainty to physician practices in the 1.25% increase in Medicare payments for 2024, they’ll need to take a really hard look at whether that’s adequate in light of the 3.36% reduction anticipated by CMS, high rates of medical inflation, and workforce shortage issues that have impacted every specialty across the house of medicine,” said McCarthy.
The article in its entirety can be read below:
AMA Pushes Medicare Pay Revisions While Family Docs, Surgeons Square Off Over E/M Add-On
The American Medical Association has support from more than 100 lawmakers for long-term Medicare physician pay reform, while specialists and family physicians clash over a new evaluation and management code for complex patients that contributed to the overall drop in CMS’ proposed 2024 conversion factor. But lobbyists don’t expect long-term physician payment reform to move until next year or beyond, and are looking at various potential shorter-term pay relief options.
Some lobbyists believe that with doctors facing a proposed 3.3% pay cut, including a small patch for 2024 that was passed at the end of last year, lawmakers will have to step in with some relief. But others believe an extension of the alternative pay model bonus could have a better shot of being included in year-end legislation than an overall pay bump.
Inside Health Policy previously reported that a bipartisan group of House members was gathering support for Medicare physician pay reform in the run up to a House Energy & Commerce oversight subcommittee hearing on the Medicare Access and CHIP Reauthorization Act. AMA recently touted the letter, noting that more than 100 House lawmakers ultimately signed on.
“The letter points out the problematic Medicare payment system that fails patients because physician practices are struggling to keep their doors open amidst spiking inflation and rising costs. As a pillar of its Recovery Plan for America’s Physicians, the American Medical Association has urged member of Congress to take up Medicare reform to ensure that patients will have access to health care,” AMA says.
But since the letter went to House leadership in late June, lobbyists have become skeptical that long-term physician pay reform could move. Many believe Congress will have neither the time nor the money to tackle longer-term reforms before the end of the year, especially as physicians have been pushing for an annual provider pay bump tied to the Medicare Economic Index and that could be pricey.
One lobbyist told IHP the hearing and House letter signal lawmakers’ acknowledgement of the need for a long-term fix, but it could take a year, or even two, before Congress has the bandwidth to tackle longer-term reforms.
What, if anything, Congress might do in the next few months is still up in the air, the lobbyist said.
Rodney Whitlock, vice president at McDermott+Consulting, said most people think Congress must take action before the year ends to tackle the 3.3% drop in the conversion factor in the proposed 2024 physician fee schedule, though it’s not clear how that would get that accomplished given the cloudy congressional forecast, and others agreed.
However, a third lobbyist said that since Congress passed a 1.25% patch for the 2024 physician fee schedule at the end of last year, additional patches are unlikely.
“While Congress provided some certainty to physician practices in the 1.25% increase in Medicare payments for 2024, they’ll need to take a really hard look at whether that’s adequate in light of the 3.36% reduction anticipated by CMS, high rates of medical inflation, and workforce shortage issues that have impacted every specialty across the house of medicine,” said Shea McCarthy, partner at Thorn Run Partners.
When CMS proposed a 3.3% decrease to the conversion factor, the agency pointed to the lower, 1.25% mitigation factor from Congress and changes to evaluation and management pay, including the implementation of the add-on code for complex evaluation and management services, as driving forces behind its calculations. The add-on code has earned support from the American Academy of Family Physicians, and American College of Physicians, while surgical organizations have opposed its implementation.
“If implemented, this code will inappropriately result in overpayments to those using it while at the same time penalizing all physicians due to a reduction in the Medicare conversion factor that will be required to maintain budget neutrality under the PFS,” the surgical organizations say in a July 26 letter to CMS Administrator Chiquita Brooks-LaSure.
On the other hand, AAFP and ACP say in their letter that the add-on code is “long overdue, necessary, and will ultimately ensure the Medicare program provides patients with timely access to longitudinal, comprehensive, coordinated, whole-person care.”
Julius Hobson, senior policy advisor at Polsinelli, said an extension of the alternative pay model bonus past the end of the 2023 is more likely than an overall pay bump meant to counteract the conversion factor cut — but even that still could be difficult given the current fiscal climate.
The Value in Health Care Act, which would extend the APM bonus at 5% for two years, was recently introduced by Reps. Darin LaHood (R-IL) and Suzan DelBene (D-WA) and backed by close to 20 physician groups. The APM bonuses were extended at 3.5% last year, which one lobbyist noted was due to budget constraints.
However, Aisha Pittman, National Association of Accountable Care Organizations’ senior vice president of government affairs, said the 5% APM bonuses are important to ensure providers’ incentives for participating in APMs are larger than the incentives for the Merit-based Incentive Payment System.
“We’re hopeful that Congress does another extension of the incentive payments at the end of the year while we continue to discuss the ideal long-term approach,” she said