The Biden administration is proposing cuts to physician payments in its annual fee schedule, and doctors are not happy.
Major industry groups have roundly called for Congress to step in to prevent the Medicare reimbursement changes from going through. Last week, the Centers for Medicare & Medicaid Services (CMS) proposed a 3.34% cut to the fee schedule's conversion factor, which is used to calculate Medicare payouts to docs.
In a statement, the American Medical Group Association (AMGA) said that Medicare payments already fail to keep up with "the increasing cost of delivering healthcare," and further cuts would only exacerbate that problem.
“AMGA members cannot absorb this proposed payment cut,” said AMGA President and CEO Jerry Penso, M.D. “Their expenses are continuing to increase, and Congress needs to act to ensure Medicare’s reimbursement reflects the cost of delivering high-quality care to patients. We’re concerned AMGA members may be forced to make tough decisions on staffing and the services they can offer to their communities if proposed cuts are left unaddressed.”
This echoes comments from the Medical Group Management Association that were issued shortly after the rule dropped. The group said Congress should examine existing Medicare law to ensure that physicians are compensated fairly, and "do away with Medicare’s ‘robbing Peter to pay Paul’ budget neutrality requirements to provide much-needed financial stability for medical practices.”
CMS said in a release on the physician fee schedule that while payments overall will see a cut, key areas such as primary care will see reimbursements increase. The agency is also proposing new codes to pay for caregiver training as well as behavioral health services provided by marriage and family counselors as well as mental health counselors, both firsts in Medicare.
However, these measures were not enough to stave off the ire of physicians. Jesse Ehrenfeld, M.D., president of the American Medical Association (AMA), said in a statement that the latest fee schedule proposal is "a critical reminder that patients and physicians desperately need Congress to develop a permanent solution that addresses the financial instability and threatens access to care."
Ehrenfeld noted that the fee schedule estimates the Medicare Economic Index, which is the government's measure of inflation for medical practices, will grow by 4.5%, the highest rate so far this century. AMA said that Medicare payments to docs have declined effectively by 26% since 2001 when adjusted for inflation, and physicians are one of the only providers who do not receive an automatic inflationary increase.
“This is almost biblical in its impact," Ehrenfeld said. "Seven lean years that include a pandemic and rampaging inflation. Physicians need relief from this unsustainable journey."
Earlier this year, AMA and its partners developed a road map (PDF) for reforming Medicare payments to physicians. The policy proposals center on ensuring docs have financial stability and predictability while enabling value-based care and ensuring that the quality of services provided does not suffer. The recommendations are endorsed by dozens of physician organizations.
The American Academy of Family Physicians (AAFP) acknowledged CMS' positive efforts in the physician fee schedule but said the lack of intervention from Congress on payments "may undermine this progress and jeopardize timely access to care."
"These cuts are unacceptable and could threaten practice stability and undermine physicians’ goals of increasing access to primary care. MedPAC and the Medicare Board of Trustees share our concerns and recently recommended action to update payment rates," said Tochi Iroku-Malize, M.D., president of AAFP. “Sweeping reform will help protect Medicare beneficiaries’ access to primary care in their own communities—but physicians can’t do this alone."