Senate Finance Committee to look at Medicare physician reimbursement

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Family medicine will be part of the conversation this week in Washington, D.C., as senators discuss reforming Medicare payments to doctors.

Meanwhile, the Medicare Payment Advisory Commission (MedPAC) also will meet this week, although its latest recommendation on a physician reimbursement increase is “woefully inadequate,” according to the Medical Group Management Association (MGMA).

Finance Committee

On April 11, the Senate Finance Committee will convene the hearing “Bolstering Chronic Care through Medicare Physician Payment.” It will focus on updating traditional Medicare for the next generation by focusing on managing and treating chronic illness, along with payment methods for physicians and other clinicians providing health care services.

The witness schedule includes Steven P. Furr, MD, president of the American Academy of Family Physicians. Additional testimony is expected from Patricia L. Turner, MD, MBA, executive director and CEO of the American College of Surgeons; Melanie Matthews, MS, CEO of Physicians of Southwest Washington; and Amol Navathe, MD, PhD, associate professor at the University of Pennsylvania.

Committee Chairman Sen. Ron Wyden (D-Oregon) announced the hearing. The session “builds on Chairman Wyden’s longstanding commitment to updating and strengthening Medicare’s guarantee of high-quality health benefits for chronic illnesses such as cancer, diabetes, and heart disease,” according to the official announcement.

“In 2018, Congress passed the CHRONIC Care Act which made policy improvements across the program to help Medicare providers better serve the unique needs of seniors with multiple chronic illnesses,” the announcement said.

MedPAC to meet

Medicare payment has been a sore spot for physicians for months due to a 3.37% cut in the 2024 Medicare Physician Fee Schedule. Federal spending bills last month added a 1.68% increase for doctors, although that move may not be enough for some practices already struggling with inflation.

This year, a bipartisan group of senators also announced they were collaborating on the new Medicare Payment Reform Working Group. Their opening “the physician payment system has failed to keep pace with the actual cost of care and the improvements in new services and technologies.”

The Senate Finance Committee hearing is scheduled for the same day as part of the April meeting of the Medicare Payment Advisory Commission (MedPAC). The afternoon session of April 11 is scheduled to include “approaches for updating the Medicare physician fee schedule.”

In March, MedPAC issued a report to Congress stating Medicare physician payment is expected to decline in 2025 due to a 0% update for next year.

“Given recent high inflation, cost increases could be difficult for clinicians to continue to absorb,” The report said. “Yet current payments to clinicians appear to be adequate, based on many of our indicators.”

MedPAC recommended updating the 2024 Medicare base payment rate for physician and other health professional services by the amount specified in the current law plus 50% of the projected increase in the Medicare Economic Index (MEI). Based on the MEI projections as of March, the 2025 update would be 1.3% above current law.

“Our recommendation would be a permanent update that would be built into subsequent years’ payment rates, in contrast to the temporary updates specified in current law for 2021 through 2024, which have each increased payment rates for one year only and then expired,” said the executive summary of the March 2024 MedPAC report to Congress.

‘Woefully inadequate’

MGMA panned the 50% recommendation as “woefully inadequate.”

“I am mystified why MedPAC even bothers to make an annual recommendation while it ignores the significant Medicare cuts to physicians in 2024 and recent years,” MGMA Senior Vice President of Government Affairs Anders Gilberg said in a statement. “Medical practices continue to suffer from staffing shortages and cost increases across the board.

“On behalf of the nation’s medical groups – ranging from small physician practices in rural areas to large regional and national health systems – MGMA once again implores Congress to ensure continued access to care for vulnerable Medicare beneficiaries by passing legislation to provide an annual inflation update based on the full MEI and modernize antiquated Medicare budget neutrality policies," he said.