Senators could change cut in Medicare Physician Fee Schedule

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It’s not too late to reverse provisions that will cut physician pay in the 2024 Medicare Physician Fee Schedule (PFS), according to the Medical Group Management Association (MGMA).

The Senate Finance Committee met Nov. 8 to kick off deliberations on a bill, the “Better Mental Health Care, Lower-Cost Drugs, and Extender Act,” which could have a number of effects on health care. MGMA submitted a statement with its policy recommendations.

At the top: Avert the 3.4% cut to the Medicare conversion factor that the U.S. Center for Medicare & Medicaid Services (CMS) has planned in the PFS for 2024.

The new bill includes a 1.25% increase in the Medicare PFS, but “not addressing the full cut would only compound previous reimbursement cuts and result in numerous negative consequences that would ripple across the health care sector,” said the letter from Anders Gilberg, MGMA senior vice president for government affairs.

“CMS’ recently finalized conversion factor cut only illuminates the pressing need for a rational long-term payment system that does not result in yearly reductions,” Gilberg said in the letter. “Without providing a commonsense annual inflation update for physicians – similar to other payment systems under Medicare – medical groups will continue to face financial barriers to remaining open and providing vital access to care for patients in their communities.”

Factoring in inflation, physician reimbursement has dropped 26% from 2001 to now, as operating costs continue to increase, Gilberg’s letter said.

Cutting physician pay will lead to practices reducing numbers of new Medicare patients and of charity care. Medical companies will cut staff and close satellite offices, the letter said.

“We strongly urge the Committee to pass legislation to prevent the full 3.4% cut,” Gilberg said in the letter.

A permanent solution

Congress also should change the budget neutrality required in the Medicare Part B payment system, but that hurts the financial viability of medical groups. Medicare needs a permanent solution that stops yearly cuts to physician pay, according to MGMA.

Lawmakers should approve an annual inflation-based physician payment update that corresponds to the Medicare Economic Index. It is part of other pending legislation introduced by a bipartisan group of congressional physicians, and “is long overdue to bring physician payment in line with the costs of providing care,” the MGMA letter said.

APMs

Alternative payment model (APM) incentive payments should be restored to 5% to help physician practices adopt value-based care, according to MGMA.

The APM incentive payment is 3.5% this year and is set at 1.75% for 2024. The greater 5% incentive would help ensure financial viability of medical groups making the transition to value-based care.