New year, new Congress, outdated Medicare physician payment system

The U.S. health care system will benefit from some provisions in the federal spending plan approved in Congress and signed by President Joe Biden late last year.

But more work is needed to improve Medicare’s system for reimbursing physicians.

A coalition representing almost 600,000 physicians and medical students urged the 118th Congress “to address outdated Medicare physician payment so that patients can access the high-quality care they deserve, and physicians have the resources and flexibility they need.” The demand came from the American Academy of Family Physicians, the American College of Physicians, the American Osteopathic Association, the American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, and the American Psychiatric Association.

Things could have been worse – the federal budget mitigated a scheduled 6.5% cut in Medicare payments originally scheduled for 2023. But physicians still face a 2% reduction in the Medicare conversion factor, which eventually leads to bad news for patients.

“Physicians are struggling with rising practice costs, and any payment reduction jeopardizes their practice viability and patients’ access to timely, comprehensive care,” the joint statement said. “The annual threat of Medicare payment cuts underscores the critical need for Congress to invest in a more sustainable Medicare physician payment system – which is the only Medicare payment system lacking an annual inflationary update.

“We urge members of Congress to prioritize comprehensive Medicare payment reform this year and look forward to working with them to advance meaningful policies to improve health outcomes and access to care,” the statement said.

The news for 2023 was not all bad. The medical groups noted the bill will help some Americans have timely access to care:

• Virtual care will continue through extension of Medicare telehealth flexibilities, including audio-only services.
• States will extend postpartum Medicaid coverage for a year, with continuous 12-month health care coverage for children enrolled in Medicaid or the federal Children’s Health Insurance Program.
• Investments in Medicare’s Graduate Medical Education (GME) program will facilitate training for additional new physicians in specialties that are in short supply. In an earlier summary, the American Hospital Association said the budget will provide 200 additional GME) slot with at least half dedicated to psychiatry and psychiatry subspecialty residencies.