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Diving brief:
- The Senate Finance Committee is considering policies to create more stability in Medicare payments for doctors, an update acclaimed by physician groups that have long pushed for reforms to how the insurance program reimburses clinicians .
- Committee Chairman Ron Wyden, D-Ore., and Ranking Member Mike Crapo, R-Idaho, released the white paper Friday proposing that Medicare adjust payments to account for inflation, a key goal for doctors who argue that government reimbursement has not kept pace. rising costs.
- The Senate Finance Committee also wants to explore ways to use incentives to increase provider participation in alternative payment models, as well as potential changes to Medicare's budget neutrality requirements, which require CMS to reduce payment of certain specialties to increase it for others.
Dive overview:
Medicare reimburses outpatient physicians based on an annual payment rule called the Physician Fee Schedule, or PFS. The PFS determines how much to pay physicians for specific services by starting with relative value units (measures of resources needed to provide a service), adjusting them for a physician's geographic area, and multiplying that figure by a conversion factor.
However, this calculation does not include an annual adjustment for inflation, unlike other Medicare payment systems. As a result, doctors criticize the PSF for not reimbursing them sufficiently to take into account the increase in costs, thus threatening the sustainability of their practices.
Doctors aren't the only concerned groups. In a recent report, Medicare administrators – a group that includes the HHS secretary – said that access to program doctors could become a “significant long-term problem” due to the growing gap between price updates and physician costs.
Congressional Advisory Group MedPAC raised similar concerns that inadequate payment could threaten older adults' access to Medicare-covered care, especially as more Americans age into the program.
In Friday's white paper, the Finance Committee expressed interest in policy options to update the conversion factor in a more predictable manner, while accounting for rising costs. This could include tying the annual conversion factor update to the Medicare Economic Index, an annual measure of cost inflation for clinicians.
MedPAC, for example, suggested annual updates to conversion factors tied to 50% of the MEI. However, the American Medical Association and other clinician groups argue that Congress should pass a 100 percent update to the MEI, which would result in significantly higher payments.
Lawmakers also want to find ways to improve incentives for participation in alternative payment models intended to pay for health care services by value, not volume, according to the white paper. Any incentives should increase the participation of independent physicians in accountable care organization models, the Finance Committee said, citing recent research findings that saves Medicare more money.
The Finance Committee also said it was interested in Medicare's budget neutrality provision, which is unpopular with doctors.
The law requires CMS to adjust the PFS to be budget neutral if changes to RVUs increase annual spending by more than $20 million. This means that when some specialties see their payment adjustments increase, it requires decreases for others.
Physician organizations have pushed for a higher threshold, as well as annual increases. According to the white paper, lawmakers want to explore “enhancements” to budget neutrality requirements to provide more flexibility in determining price adjustments for services, while still preserving fiscal integrity.
In a statement, the Medical Group Management Association said the white paper is encouraging, particularly the Finance Committee's focus on updating physician payments annually to match inflation and modernizing Medicare’s “outdated” budget neutrality policies.
The National Association of ACOs also said it supports lawmakers' consideration of alternatives to the current bonus structure in value-based care models, as well as better updates to payment than the factor current conversion rate.