Physician Groups Argue for Increase in 2023 Medicare Payment

Kerry Dooley Young

March 16, 2022

Physician groups are urging Congress to ignore an influential panel's recommendation in favor of a flat 2023 Medicare payment calculation rate, arguing that a flawed quality-measurement framework, rising inflation, and challenges of the pandemic make an increase necessary.

The Medicare Payment Advisory Commission (MedPAC) on Tuesday released the latest version of its annual March report to Congress. These reports include recommendations on how the giant federal health program should reimburse clinicians, as well as hospitals and other sites of healthcare. Lawmakers and Medicare officials pay attention to MedPAC's recommendations, although they are not bound by them.

For 2023, Congress should stick with current law and make no change to the Medicare base payment rate for physician and other healthcare professional services, MedPAC said.

In January, the panel voted 17-0 for this recommendation, with several members stressing a need to revisit in the future Medicare's approach to paying clinicians for office visits, covered by Part B.

MedPAC's publication of its annual report to Congress also served as a trigger for physician groups to criticize a Medicare quality-measurement system widely considered flawed.

In separate statements, the American Medical Association (AMA) and the American Academy of Family Physicians (AAFP) noted how the disappointing implementation of a 2015 overhaul of Medicare physician pay has affected their members.

Lawmakers in both parties saw the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as a plan for tying future increases in physician payment to improved quality of care. They devised this law with the intent that physicians would seek to boost their pay by getting good marks on metrics used to judge quality of care.

The law called for keeping base calculations for the update to the physician fee schedule flat for several years, with the aim of compelling clinicians to participate in alternative payment models and gain money through better scores on metrics.

A "Failed" Shift to Value-Based Care

But the 2015 physician overhaul law has not worked out as intended, with far fewer clinicians qualifying for bonus payments than expected. At the same time, physicians are seeing costs rise because of inflation and still are managing through the toll of the pandemic.

"Unfortunately, MACRA has thus far failed to adequately support clinicians in the move to alternative payment models, leaving the majority in fee-for-service," said Sterling N. Ransone, Jr, MD, president of AAFP, in a Tuesday statement.

Limiting Medicare pay will make it difficult for physicians in primary care to make the investments needed to gain bonuses in a MACRA-designed system, Ransone said.

"Without a positive payment update and with continued rising costs, we risk forcing independent practices to be acquired by large health systems, further increasing health care costs for patients," Ransone said.

AMA released a copy of a letter that its chief executive officer, James L. Madara, MD, sent to congressional leaders on Tuesday.

In it, Madara cited an article published in May 2021 in JAMA Health Forum that reported on the costs for complying with the Medicare Merit-Based Incentive Payment (MIPS), which is a key feature of MACRA. In 2019, MIPS compliance cost an average of $12,811 per physician, consuming more than 200 work hours per physician, Madara wrote, citing the article.

"In addition to being asked to do more with fewer resources each year, physicians continue to face significant clinical and financial disruptions during the COVID-19 pandemic," Madara wrote in the letter. "Burnout, stress, workload, and fear of COVID-19 infection are leading one in five physicians to consider leaving their current practice within two years."

MedPAC itself has found MIPS to have fallen short of the goals envisioned by Congress.

In 2018, MedPAC recommended eliminating MIPS and replacing it with a voluntary value program, in which groups of clinicians would receive increases or decreases based on their performance on a uniform set of measures assessing outcomes, patient experience, and value.

In the report released Tuesday, MedPAC noted flaws with MIPS, which was intended to let clinicians choose to emphasize which aspects of their practice are measured.

But what resulted was a flawed system in which metrics often focus on how processes of care are handled instead of on determinations of how much the patients benefit. In addition, many clinicians did not have enough cases to allow reliable scoring and thus were not evaluated.

"Further, the design is at odds with the fact that quality outcomes for patients — the principal objective of any value improvement program — are determined primarily through the combined efforts of many providers rather than by the actions of any one clinician," MedPAC wrote in the March report.

Continuing Debates

Medicare's payments for clinician services were $64.8 billion in 2020, $8.7 billion less than the previous year. This pool of money covered services provided by almost 1.3 million clinicians, including physicians, nurse practitioners, physician assistants, therapists, and chiropractors.

The current battles about Medicare's physician fee schedule payments are part of debates that stretch back over decades. The AMA and physicians groups are continually tussling with lawmakers and federal officials over money, with the base rate being just one factor in calculations.

In a statement about MedPAC's March report to Congress, Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, noted another fiscal challenge for physicians.

Medicare payments are set to be reduced by a mechanism called sequester, which Congress has used in an attempt to reign in federal spending. This had been suspended during the pandemic, which is classified as a public health emergency (PHE).

"With reinstatement of the 2% Medicare sequester penalty scheduled to begin phasing-in in a few short weeks, physician practices are already set to face serious financial impacts — at a time when they are still reeling from pandemic related disruptions, rampant staffing shortages and skyrocketing expenses — making MedPAC's decision even more out of touch with the reality physician practices face every day," Gilberg said.

In the March report, MedPAC said it had taken into account the sequester and the effects of the pandemic in weighing its recommendation on physician pay.

"Although clinicians have experienced declines in their Medicare service volume and revenue due to the pandemic, the Congress has provided tens of billions of dollars in relief funds to clinicians during the PHE, and we expect volume and revenue to rebound to prepandemic levels (or higher) by 2023," MedPAC wrote.

Kerry Dooley Young is a freelance journalist based in Washington, DC. She is the core topic leader on patient safety issues for the Association of Health Care Journalists. Young earlier covered health policy and the federal budget for Congressional Quarterly/CQ Roll Call and the pharmaceutical industry and the Food and Drug Administration for Bloomberg. Follow her on Twitter at @kdooleyyoung.

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