AMA to CMS: Be clear with doctors and patients about effects of cuts to physician pay

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Medicare payments to physicians should be based on inflation instead of simply cutting reimbursement to doctors, according to the American medical Association (AMA).

The U.S. Centers for Medicare & Medicaid Services (CMS) needs to come clean about the effects of decreasing payment to physicians, which in turn affects patient care, AMA said in a letter this month.

In July, CMS proposed a 2.8% drop in physician reimbursement – while recognizing the Medicare Economic Index that measures inflation for practice costs is going up by 3.6%. CMS, doctors and the administration need to work with Congress to enact a solution so a permanent yearly update to Medicare physician payment reflects inflation, according to AMA.

“In other words, while the costs of paying clinical and administrative staff, rent, and purchasing equipment and supplies are projected to rise by 3.6 percent, physicians’ payments will decrease by nearly (3%),” said the comment letter from CEO and Executive Vice President James L. Madara, MD. “Yet, this proposed rule is silent on the impact of the growing gap between what Medicare pays for care and what it costs to provide that care. A chorus of authorities on the Medicare program has expressed concern about the ability of patients to continue receiving high-quality care as physician payments erode.”

Policy priorities, payments and patients

Madara’s letter was the start of a 113-page analysis with updates to payment provisions, updates to the Quality Payment Program, and additional requests for information.

He listed some key changes that do not bode well for patients, per the policy priorities of President Joe Biden and his administration. Some examples:

• Bilateral screening mammography, recommended every other year for women aged 40 to 74 years, this year will drop 2.5% compared with 2023.
• Primary care office visit payment this year will dip 0.7%, and after several years of cuts, the 2024 reimbursement will be 4.1% below the 2021 rate.
• Obstetric care for prenatal, childbirth and postpartum care is down 0.6% from 2023.

As for 2025, a cut of 2.8% is looming for treatments for seniors, people with disabilities, those who need behavorial health care and suicide prevention, Medicare patients with multiple chronic conditions, and those in need of eye care, according to AMA.

“The 2025 cuts compound across-the-board cuts in 2021, 2022, 2023, and 2024, AND are not sustainable for physicians and their patients, and risk jeopardizing the Administration’s priorities and access to critical services,” Madara’s letter said.

More concerns

AMA also has concerns about revisions and clarifications to new Current Procedural Terminology (CPT) codes. CMS must collaborate with AMA’s CPT Editorial Panel through a transparent review process, Madara said.

Meanwhile, physicians in the Merit-based Incentive Payment System face penalties up to 9% for Medicare reimbursement.

“Yet, research shows that the program is about as good as random chance at identifying high quality care; disproportionately penalizes small, rural, and independent practices; and exacerbates health inequities,” Madara wrote. “The cost measures hurt specialists whose patients incur higher spending when they receive evidence-based care, like oncologists, and the inadequate number of specialty-specific quality measures artificially limits the scoring potential of specialists whose services are vital to diagnostic accuracy, such as radiologists and pathologists, among others.”