Advocacy Update

Nov. 3, 2023: Medicare Payment Reform Advocacy Update


In a letter (PDF) to the Medicare Payment Advisory Commission (MedPAC), the AMA strongly urged MedPAC to recommend that Congress update Medicare physician payment by 100% of Medicare Economic Index (MEI).

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As the commission pointed out, the gap between what Medicare pays physicians and the actual costs associated with delivering high-quality care continues to grow. Physician practices cannot continue to absorb increasing costs while their payment rates dwindle. In fact, physicians are leaving independent practice and inadequate payment is the most cited reason that independent physicians sell their practices to hospitals, according to an AMA analysis (PDF).  

In addition, the AMA:

  • Highlighted the large and frequent redistributions caused by budget neutrality within the Medicare physician payment schedule 
  • Shared pertinent data about the drivers of volume and intensity growth within the Medicare physician payment schedule 
  • Underscored the extensive work of the AMA/Specialty Society Relative Value Scale Update Committee (RUC) to identify and revalue potentially misvalued services 
  • Agreed that the Merit-based Incentive Payment System (MIPS) is meritless and recommended statutory changes to reduce burden, increase clinical relevance and prepare physicians to move to alternative payment models (APMs) 
  • Discussed support for the Value in Health Care Act, which would continue the advanced APM incentive payments, among other important changes to increase physician participation in APMs 

The AMA—alongside 121 national medical specialty societies and state medical associations—sent a letter (PDF) to GOP Doctors Caucus co-chairs, Representatives Brad Wenstrup (R-OH), Greg Murphy (R-NC) and Michael Burgess (R-TX), thanking them for their leadership in introducing draft legislation to reform budget neutrality policies applied to the Medicare Physician Fee Schedule.  

The discussion draft’s provisions offer practical policy improvements that would add crucial stability and predictability to Medicare physician payments. These provisions include: 

  • Providing the Centers for Medicare & Medicaid Services (CMS) with the ability to reconcile inaccurate utilization projections based on actual claims.
  • Raising the budget neutrality threshold from $20 million to $53 million and increasing it every five years by the cumulative increase in MEI.
  • Requiring the Secretary to limit positive or negative budget neutrality adjustments to the conversion factor to 2.5% each year. 

The AMA is strongly urging (PDF) CMS to reweight the 2022 Cost Performance Category to 0% of MIPS final scores to nullify the negative impact of the problematic measures on 2024 Medicare physician payment, on top of an across-the-board reduction to the conversion factor. The AMA also urged CMS to study and re-evaluate the Cost Performance Category and all administrative claims measures.  

Physicians had no way to anticipate, monitor or improve their Cost Performance Category score because CMS did not share any data about their attributed measures, attributed patients, or observed costs until Aug. 2023—more than eight months after the conclusion of the performance period. Prior to Aug. 2023, there had been no information about this category since 2020 based on 2019 performance due to the COVID-19 pandemic. Without transparency and actionable data, these measures are viewed as a mechanism to penalize physicians, rather than to help them improve and reduce unnecessary costs for Medicare beneficiaries and for the Medicare program.  

The AMA also raised concerns that CMS did not use the most updated Current Procedural Terminology (CPT) codes for its Total Per Capita Cost (TPCC) and Medicare Spending Per Beneficiary measure specifications in 2022 and 2023. The Evaluation & Management (E/M) section of the CPT code set underwent a major update in 2021, resulting in significant changes to the Office & Other Outpatient Visit codes. In 2023, other code ranges were updated as well, including the Inpatient & Observation codes, Nursing Facility codes and Emergency Medicine codes to name a few. These changes are on top of the usual yearly addition/revision/deletion of codes throughout the set. The CMS MIPS CPT coding specifications for TPCC and MSPB do not align with the CPT codes for the 2022 performance period or the current year (2023).  

Finally, the AMA relayed multiple accounts of unintended negative consequences of the cost measures. For instance, the AMA heard from a large multi-specialty practice that they scored poorly on the joint replacement episode-based cost measures (EBCMs), despite being high performers in the Center for Medicare Innovation’s Bundled Payments for Care Improvement Advanced alternative payment model.  

When taken together, these problems raise serious doubts about whether the MIPS cost measures are fairly and accurately assessing variations in costs within the control of MIPS-eligible clinicians as intended. 

The AMA joined national medical specialty societies and health care organizations in a letter (PDF) of support for the SURS Extension Act, which would renew an important technical assistance program known as the Quality Payment Program Small, Underserved, and Rural Support (QPP-SURS) program. This program provided support to practices that participate in Medicare value-based payment initiatives.  

After five years of support, QPP-SURS ended on Feb. 15, 2022, leaving physicians without a direct technical assistance program to help them navigate continuously changing regulations in the remaining years and increasing performance thresholds of the QPP. Removing this critical infrastructure support further exacerbates disparities in communities already facing limited access to high-quality health care. Practices that fail to meet the MIPS performance threshold could be penalized up to 9%, which is a significant financial impact for physicians that often care for high-need, high-cost patients in underserved areas.  

The SURS Extension Act renews the QPP-SURS program until 2029 and ensures that small practices in rural and underserved areas have the support and tools necessary to succeed in the MIPS program. 

From now until March 2024, CMS—through its contractor Guidehouse—will conduct validation and audits of 2023 MIPS data for eligible clinicians and groups. CMS states that data validation and audits are designed and conducted to confirm the accuracy and completeness of reported results of the MIPS program. Practices will have 45 days from the date of the notice to provide the requested information of substantive, primary source documents. These documents may include:  

  • Copies of claims 
  • Medical records for applicable patients 
  • Other resources used in the data calculations for MIPS measures, objectives and activities 

Primary source documentation also may include verification of records for Medicare and non-Medicare patients where applicable.  

While CMS has the authority to recoup money for failure to comply with an audit or if they find an error with an incentive payment, they have told the AMA that they have no plans to recoup money currently and the purpose is more educational and to make future improvements to the program. The AMA will continue to advocate to CMS that the audits add to the administrative burden of the MIPS program and should remain educational-only.

Please refer to the MIPS Data Validation and Audit (DVA) Factsheet for PY 2022 for additional information at MIPS DVA Fact Sheet PY 2022. If you have questions pertaining to the DVA, please contact Guidehouse at [email protected]. Or you may contact the Quality Payment Program Service Center at 1-866-288-8292, Monday through Friday, 8 a.m.–8 p.m. Eastern or by e-mail at: [email protected]. Customers who are hearing impaired can dial 711 to be connected to a TRS Communications Assistant.

The AMA recently posted several new resources on Medicare’s new Making Care Primary (MCP) Model stemming from a webinar the AMA jointly hosted with the American Academy of Family Physicians and the American College of Physicians, in which the Center for Medicare and Medicaid Innovation (CMMI) staff highlighted key details of the model and fielded questions from physicians. The new resources include an on-demand recording of the webinar, slides and a frequently asked questions document, all of which can be found on AMA’s Medicare APMs webpage.  

MCP will operate in eight states including Colorado, North Carolina, New Jersey, New Mexico, Minnesota, Massachusetts, Washington and parts of New York. MCP will be a multi-payer model with prior commitments from the Medicaid agencies of the eight participating states. The model will feature several elements which have long been advocated for by the AMA, including a longer contract period of 10.5 years, three financial risk tracks to choose from, and payments to reward primary-specialty coordination, as well as upfront infrastructure payments. Applications for the model are due on Nov. 30. More information can be found on CMMI’s MCP Model webpage

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