MedPAC denies payment increase for physicians in 2023
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The Medicare Payment Advisory Commission, or MedPAC, recommended no change to the physician fee schedule for 2023, a decision that the ACP and AMA described as a freezing of physician payments.
The organizations immediately released statements criticizing the decision.
“MedPAC’s recommended plan would jeopardize access to primary care physicians and could create access problems for other specialties,” ACP President George M. Abraham, MD, MPH, MACP, FIDSA, said in a statement. “In effect, a freeze on payment rates would amount to a payment cut when inflation is factored in.”
During MedPAC’s public meeting, Ariel Winter, MPP, a principal policy analyst at MedPAC, claimed that “Medicare payments to clinicians declined by $9 billion from 2019 to 2020, but clinicians have received tens of billions of dollars in pandemic relief funds to offset financial losses due to the pandemic.”
“In addition, Congress and CMS gave clinicians much more flexibility to provide telehealth,” he added.
Despite the pandemic, physicians’ compensation from all payers increased from 2019 to 2020, Winter said.
However, according to the AMA’s research, Medicare physician payments have decreased by 20% from 2001 to 2020 when adjusting for inflation.
“The discrepancy between what it costs to run a practice and payment is sparking consolidation and driving physicians out of rural and underserved areas,” AMA President Gerald E. Harmon, MD, said in a press release. “In addition to being asked to do more with fewer resources each year, physicians continue to face significant clinical and financial disruptions during the COVID-19 pandemic.”
MedPAC did not comment on the AMA’s and ACP’s statements. A spokesperson referred Healio to the meeting transcript that included the recommendation of no change to the fee schedule.
“This should not affect beneficiaries’ access to care or clinicians’ willingness and ability to furnish care,” Winter said during the meeting.
While the American Academy of Family Physicians did not issue a public statement following MedPAC’s recommendation, a representative told Healio that “the decision to not update physician payments despite rising costs, staffing shortages and burnout is misguided.”
Hospitals, skilled nursing facilities and other health care providers qualify for annual updates to account for the rising costs of inputs and inflation, yet physician payment does not, according to the AAFP.
“A lack of updates to physician payments will worsen access to high-quality care, drive consolidation and undermine the stability of PCP practices,” the organization said. “The AAFP continues to work toward achieving the longstanding goal of transitioning physician payment away from fee-for-service and into value-based alternative payment models. However, most alternative payment models are still based on underlying fee-for-service rates, and therefore, we need to ensure those payments are adequate and appropriate now.”
In addition to the MedPAC’s recent decision on physician payments, PCPs are grappling with a controversial billing dispute provision connected to the No Surprises Act that allows insurers to determine rates that physicians and hospitals may charge, Healio previously reported. The AMA and other medical organizations have sued the federal government to change the provision. Harmon said the provision is not sustainable for providers and may result in narrower networks for insured and uninsured patients, especially in rural and underserved areas.
References:
AMA statement on continuing freeze of Medicare physician payment. https://www.ama-assn.org/press-center/press-releases/ama-statement-continuing-freeze-medicare-physician-payment. Published Jan. 13, 2022. Accessed Jan. 19, 2022.
Assessing payment adequacy and updating payments: physician and other health professional services. https://www.medpac.gov/wp-content/uploads/2021/10/Clinician-update-MedPAC-Jan22.pdf. Published Jan. 13, 2022. Accessed Jan. 19, 2022.
Internists say physician payments should not be frozen. https://www.acponline.org/acp-newsroom/internists-say-physician-payments-should-not-be-frozen. Published Jan. 14, 2022. Accessed Jan. 19, 2022.
Perspective
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Conrad L. Flick, MD
As an independent family physician, the recent decision not to update the physician payment schedule, to me, once again highlights our nation’s lack of investment and support of primary care in this nation, what should be the foundation of our health care system.
While CMS and others often mention our importance and their intent to support and assist us, this decision once again puts our specialty further at risk. Hospitals and other facilities and even some other providers receive annual updates in payments to account for rising costs associated with their functions, while physicians do not. Having some of the highest office overhead among physicians, primary care struggles to keep up with inflation and other rising costs and in being able to attract and maintain staff requiring higher salaries and benefits to compete. Not accounting for this in updating the fee schedule is extremely short sighted. Good primary care has shown time and time again to save the health care system money while providing excellent overall care. This strain of resources and finances causes staff turnover and shortages, contributes to physician burnout and could result in more consolidation of primary care practices into academic or large entities that actually increase the total cost of care without providing better care.
While the trend toward advanced payment models (APMs) is underway, and many have benefited, those are unreliable sources of income to maintain a business. Primary care remains the lowest paid among medical specialties and therefore are the specialty least able to take on risk without some other financial backing, so how long will APMs exist before some other payment structure must surface?
At a time in our country when more of our physicians need to serve communities in the primary care field, this decision will undoubtedly move primary care another step closer to not being a viable business model. If we cannot survive as a business, we cannot serve the patients or communities as we were trained and for whom we want to provide care and services.
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