Bipartisan House members introduce legislation to reform budget neutrality in the fee schedule
On March 30, a bipartisan collection of members of the House of Representatives introduced AMA-supported legislation that makes targeted improvements to the statute governing budget neutrality requirements within the Medicare Physician Fee Schedule (MPFS). Introduced by Representatives Greg Murphy, MD (R-NC), Tom Suozzi (D-NY), John Joyce, MD (R-PA), Brad Schneider (D-IL), Bob Onder, MD (R-MO), Jimmy Panetta (D-CA), Mariannette Miller-Meeks, MD (R-IA), Kim Schrier, MD (D-WA) and Robin Kelly (D-IL), H.R. 8163, the Provider Reimbursement Stability Act, represents a major component of the AMA’s overarching advocacy campaign to overhaul the Medicare physician payment system.
H.R. 8163 makes a number of targeted improvements to the MPFS including:
- Raising the existing $20 million budget neutrality trigger to $54.3 million.
- Starting in 2032, the bill also requires this figure to be increased by the cumulative Medicare Economic Index (MEI) no less frequently than every 5 years.
- Requiring the Secretary of the Department of Health and Human Services (HHS) to prospectively revise spending estimates and budget neutrality adjustments based on actual after-the-fact utilization rates derived from claims data.
- This provision only affects budget neutrality adjustments for newly unbundled codes where the Centers for Medicare & Medicaid Services (CMS) has to estimate utilization—not changes to rates where CMS has historical utilization data for either an existing code or a set of codes, or where utilization crosswalks from existing codes are used for new codes.
- This provision is only triggered when the newly unbundled code in question exceeds 0.1% of the total estimated expenditures.
- Requiring CMS to update the direct cost inputs for practice expense RVUs, specifically clinical wage rates, prices of medical supplies, and prices of equipment, simultaneously and no less often than every 5 years.
- Starting in 2027, requiring the Secretary of HHS to limit positive or negative increases to the MPFS conversion factor to no greater than 2.5% each year.
H.R. 8163 is one part of a multipronged strategy to overhaul the current Medicare physician payment system. The AMA continues to work with Congress to pass legislation such as H.R. 6160, the Strengthening Medicare for Patients and Providers Act, which would provide physicians with a permanent annual update equivalent to the MEI. In addition, AMA will urge lawmakers to continue the 3.1% Alternative Payment Model incentive payments that were recently reinstated for the 2026 performance and 2028 payment years following enactment of the Consolidated Appropriations Act, 2026. Finally, the AMA is working diligently with bipartisan members of Congress to overhaul the flawed Merit-based Incentive Payment System program.
While introduction in the House of Representatives is complete, the AMA is also working on a Senate companion bill to H.R. 8163. The AMA commends the nine House members that came together in a bipartisan manner to make these crucial targeted reforms to the MPFS.
Physicians score major win with CMS claims electronic attachments rule
CMS’ final rule on claims attachments reflects the AMA’s successful and sustained advocacy to standardize electronic attachments for claims. In comments (PDF) on the proposed rule, the AMA pushed CMS to focus attachment standards narrowly on claims and to reject adding new prior authorization or documentation requirements, ensuring the rule delivers real relief for physicians rather than new complexity. This is a tangible win for doctors because it moves practices away from inefficient manual processes like fax, mail, and payer portals for claim documentation submission and embraces a consistent electronic approach that reduces administrative burden and workflow disruption.
As a result of AMA advocacy, the rule also includes sufficient implementation time for practices and EHR developers, a single and predictable electronic signature standard, and flexibility that allows EHR innovation to improve communication with payers. Together, these changes save physicians time and money and advance progress toward end-to-end electronic workflows from the first patient interaction through claims submission. The AMA will continue pressing CMS to build on these wins by extending standardized electronic workflows to appeals and other remaining manual processes.
Details of CMS LEAD model announced; applications due May 17
CMS released the Request for Applications (RFA) (PDF) for the Long-term Enhanced ACO Design (LEAD) Model, a voluntary 10-year model set to start on Jan. 1, 2027. The RFA unveils new details about the model, which aims to attract new types of patients and practices to participate in Accountable Care Organizations (ACOs) through risk arrangements for specialists, up-front primary care investment payments, add-on payments and benchmark adjustments for complex patient populations, Medicare-Medicaid integration in two states and beneficiary engagement incentives. Applications are due May 17. CMS will provide an overview of key details of the model and application process in a webinar on April 9 from 1-2 p.m. Central time.
