Providers press CMS to pull back 4.5% doc pay cut, call for tweaks to ACO reforms

Several provider groups say the Biden administration needs to reverse a proposed 4.5% pay cut to doctors for next year, noting the agency needs to consider additional financial pressures that practices are facing. 

Groups said in comments to the Physician Fee Schedule that were due Tuesday that the Centers for Medicare & Medicaid Services (CMS) also needs to make long-term reforms to how medical practices are paid. 

“Medicare physician payment rates have failed to keep up with the cost of inflation and have become increasingly insufficient,” wrote the American Academy of Family Physicians (AAFP) in comments. “These impacts have only been exacerbated by budget neutrality requirements and congressionally mandated sequestration cuts.”

CMS proposed a 2023 conversion factor of $33.08 for each relative unit, which details how a doctor gets paid by Medicare. The conversion factor is a nearly 4.5% decline compared to the 2022 rate of $34.61.

CMS is required under law to keep the physician fee schedule budget neutral, but provider groups say the agency can do more to alleviate the impact of the cuts. 

The Medical Group Management Association urged CMS in comments to reach out to Congress and press for a positive update to the Medicare conversion factor. 

As of now, the payment reductions “will have a detrimental impact on access to care for Medicare beneficiaries and financial sustainability for medical group practices,” the group’s comments said.

Other groups highlighted specific cuts to certain services that they said exacerbate the problems from the overall conversion factor decline. 

For instance, the Community Oncology Alliance (COA), which represents independent oncology practices, asked CMS to halt a proposed 1%-2% decline in payments for oncology services. 

“The decrease in reimbursement for chemotherapy-related codes is especially troubling as more patients who delayed cancer screenings due to COVID-19 concerns/issues are presenting with more advanced cancers,” COA wrote in comments. 

The payment cuts are even worse when factoring in record-high inflation rates, the group said. 

The AAFP also chided CMS for treating laptops and other computers as “indirect practice expenses” and said they should not be included among the medical equipment associated with an individual service. 

“We believe this is an antiquated approach,” the group commented. “In family medicine and many other specialties, the laptop travels with the physician from one patient encounter to another and is a vital piece of medical equipment. We strongly urge CMS to rethink how it views laptops and other personal computers in future updates to direct practice expensive inputs.”

Improving ACOs and value-based care

Another part of the proposal that got more buy-in from providers was a slew of changes to accountable care organizations, including the introduction of upfront investments to help smaller ACOs sign up for the program.

Provider groups cheered the additional investment and other changes such as the removal of a requirement that an organization submit marketing materials for CMS approval prior to use. 

The proposed rule said an ACO wouldn’t have to take on financial risk until seven years of operation, a move that got praise from the National Association of ACOs (NAACOS) and 11 other groups in a joint comment letter.  

CMS also earned praise for proposed changes to benchmarks and risk adjustment policies that would make it easier for an ACO to quality for shared savings. An ACO agrees to meet a series of financial and quality benchmarks in exchange for a share of any savings to Medicare but must repay the government if spending reaches above those benchmarks.

However, these new policies will only apply to an ACO that starts in 2024, and the vast majority of existing organizations won’t have access until several years later unless they go through the “onerous process” of early renewal, the NAACOS letter said. 

“CMS should allow existing ACOs to opt-in to the new financial methodology approaches by amending current contracts,” the groups said.