Oct. 20, 2023: Medicare Payment Reform Advocacy Update

. 5 MIN READ

The GOP Doctors Caucus Co-Chairs, Reps. Greg Murphy (R-NC), Brad Wenstrup (R-OH) and Michael Burgess (R-TX), working closely with Ways and Means Committee Chairman Jason Smith (R-MO), and the AMA, have released a discussion draft (PDF) of legislation seeking to reform the budget neutrality policies applied to the Medicare Physician Fee Schedule (MPFS). The goal is for this proposal to generate bipartisan support from the key House and Senate committees with jurisdiction over the Medicare program.   

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This legislative proposal is largely based on the work product that came out of the AMA Medicare Reform Workgroup. The discussion draft’s provisions offer practical policy improvements to provide some needed stability to the physician payment system by assuring that the budget neutrality calculations used by the Centers for Medicare & Medicaid Services (CMS) are based on reality, not inaccurate projections of future spending or outdated practice cost data. While refining Medicare fee schedule budget neutrality policies is a key component of Medicare physician payment reform, it is important for medicine to continue pressing for the other proponents of comprehensive reform, including: 

  1. Automatic, annual inflation updates based on the Medicare Economic Index (MEI) as proposed by H.R. 2474 
  2. Reducing administrative burden and improving the clinical relevance of the Merit-based Incentive Payment System (MIPS)  
  3. Maintaining a viable pathway for physicians to opt into alternative payment models, as provided in H.R. 5013, the Value in Health Care Act 

The House Energy and Commerce Subcommittee on Health held a hearing titled “What’s the Prognosis?: Examining Medicare Proposals to Improve Patient Access to Care & Minimize Red Tape for Doctors” on Oct. 19. The purpose of the hearing was “to discuss fine-tuning Medicare payment to best serve seniors and strengthen the program.” Of particular note, the Subcommittee discussed the budget neutrality proposal, posted by the committee as the Provider Reimbursement Stability Act of 2023 (PDF), to reform the budget neutrality rules for the Medicare physician payment system. The AMA submitted a comprehensive statement (PDF) for the hearing record. 

In response to advocacy from the AMA and organized medicine, physicians may now apply for an Extreme and Uncontrollable Circumstances hardship exception to avoid an up to 9% MIPS penalty due to the impact of the COVID-19 public health emergency (PHE). The penalty would apply in 2025 based on the 2023 performance period. The exception will not be automatic, and interested physicians and groups must actively request reweighting of one or more MIPS performance categories due to the COVID-19 PHE. Requesting reweighting of all four MIPS performance categories will avoid a MIPS penalty in 2025. Applications can be submitted through Jan. 2, 2024. 

This is a big relief for physicians and their patients because the AMA is hearing that physicians are facing MIPS penalties for the first time in 2024 due to the increasingly stringent requirements to participate in MIPS. It is also likely that small, rural and practices providing care to underserved populations would have been disproportionately impacted by these penalties.  

In a recent sign-on letter (PDF), the AMA—along with 23 physician and health care associations and more than 600 health systems, hospitals, physician practices, health clinics, and accountable care organizations—urged House and Senate leadership to include Section 3 of the Value in Health Care Act in any end-of-year legislative package. This bipartisan legislation would extend the 5% advanced alternative payment model (APM) incentive payments that were authorized under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) for two additional years. These incentive payments have given physicians the opportunity to transition to advanced APMs by covering some of the investment costs.  

Without congressional action, eligibility to earn these incentive payments is set to expire at the end of 2023. Physicians would likely have to remain in or return to MIPS, even further delaying progress toward value-based care.  

Payment cuts and temporary fixes have become predictable in Medicare physician payment over the past decade—leaving physician practices and patient access to care at serious risk. We’re working to change that by urging lawmakers to work with the physician community to permanently reform the system. Congress needs to establish a permanent, annual inflationary Medicare physician payment update that keeps up with the cost of practicing medicine and encourages practice innovation.   

Register now for the AMA Advocacy Insights webinar, “What’s next with Medicare payment reform,” on Fri., Nov. 3 at 1:00 p.m. Central time to hear about: 

  • Where Medicare payment reform stands now 
  • How the AMA, alongside state and national medical specialty societies, is pushing for permanent payment reform 
  • How you can get involved in these advocacy efforts 

Moderator: 

  • Willie Underwood III, MD, MSc, MPH, chair, AMA Board of Trustees 

Speakers: 

  • G. Ray Callas, MD, president-elect, Texas Medical Association 
  • Katie Orrico, senior vice president, Health Policy and Advocacy, American Association of Neurological Surgeons/Congress of Neurological Surgeons 
  • Todd Askew, senior vice president, Advocacy, American Medical Association 

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