Doctors: Inadequate Medicare compensation creating 'barriers to care'

Doctors are among the highest-paid professionals in the nation, but what they’re paid to take care of Medicare patients could lead them to shut the door to America’s seniors.

A 2015 Medicare law that doctors argue is contributing to uncertainty and instability in their payments under the program is getting special scrutiny from lawmakers.

The Medicare Access and CHIP Reauthorization Act, also known as MACRA, substantially reformed how physicians are compensated under the program in attempts to reward quality of care rather than quantity.

But physicians' groups have been pressing for an overhaul of the payment system, including an update so payments keep up with inflation.

The House Energy and Commerce Oversight and Investigations Subcommittee is holding a “checkup” on the 2015 law Thursday to look at continued challenges for patients and doctors.

Christian Shalgian, the director of the American College of Surgeons’ Division of Advocacy and Health Policy, said this hearing was long overdue: “We’ve been calling for these hearings to happen for years. The Medicare physician-payment system is entirely broken.”

But Shalgian said he was “disappointed” that there will not be a witness from the Centers for Medicare and Medicaid Services. He added that fixing the system will take a long time, but that it needs to be stabilized because “you can’t build this on quicksand.”

The American Academy of Family Physicians told National Journal in a statement that “inadequate Medicare and Medicaid payment rates strain physician practices and create barriers to care for beneficiaries.”

The organization said the physician-payment system is the only one under Medicare that lacks an annual inflationary update, a concern highlighted by multiple doctors' groups. In March, a report from the Medicare Trustees said MACRA’s payment structure could create a problem because it doesn’t take economic conditions into account.

“The specified rate updates could be an issue in years when levels of inflation are high and would be problematic when the cumulative gap between the price updates and physician costs becomes large,” the report states.

A bipartisan group of House lawmakers—who are also doctors—want to change this. Democratic Reps. Raul Ruiz and Ami Bera and GOP Reps. Larry Bucshon and Mariannette Miller-Meeks introduced legislation in April that would provide an annual Medicare physician-payment update based on the Medicare Economic Index, a measure of inflation for physicians’ operating costs. Ruiz sits on the subcommittee that will hold the hearing Thursday.

“Unfortunately, physician reimbursement rates have declined over the past several years, even as inflation continues to increase,” Ruiz said in a Wednesday statement to National Journal. He added that Medicare reimbursement rates declined by 26 percent between 2001 and 2023 when inflation rates are factored in.

“Ensuring that our seniors can access their doctors becomes even more crucial when factors like hospital closures and limited patient-to-doctor accessibility threaten to make it increasingly challenging for Medicare patients to receive the care they need,” the California Democrat said.

The change has the backing of the American Medical Association, which warned that physicians may stop taking Medicare patients after facing a 2 percent payment cut this year. “Increasingly thin operating margins disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or other historically minoritized or marginalized patient communities,” the AMA said in an April press release.

In a letter sent this week to the subcommittee leaders ahead of Thursday’s hearing, the American Academy of Family Physicians is urging Congress to pass the bipartisan bill, describing the legislation as an “important first step in reforming Medicare payment to help practices keep their doors open, resist consolidation, and ensure continued access to care for beneficiaries.”

The group also is pushing for a multiyear extension of incentive payments to physicians who participate in advanced alternative-payment models. These payment models aim to move away from fee-for-service payments and prioritize quality of care. If doctors met payment or patient-participation thresholds through the payment model, they would be eligible for a 5 percent incentive payment.

The last year that was slated to be used as a base for these bonuses was 2022, meaning physicians would receive these incentive payments in 2024. Congress included a one-year extension of the bonus in 2023 but lowered it to 3.5 percent. The American Academy of Family Physicians argues the incentive is essential to recruiting and retaining physicians in the payment models; the group is calling for the bonus to be extended, at 5 percent, for five years.

In the memo outlining the focus of the hearing, committee staff note that the transition to alternative-payment models has been slow, especially for small, independent doctors and physicians in rural areas.

Aisha Pittman, senior vice president of government affairs at the National Association of ACOs, will push for the extension of the incentive payments Thursday, according to her prepared testimony.

In ACOs—accountable care organizations—providers, like doctors or hospitals, collaborate to provide high-quality care at reduced costs that could generate shared savings. They contract with one or more payers in arrangements like the Medicare Shared Savings Program. According to Pittman’s written testimony, ACOs account for more than 90 percent of Medicare’s advanced alternative-payment models.

Pittman expressed concern that if the incentive payments are allowed to expire, “it will have a chilling effect on participation in models that have seen growing uptake in recent years.”

The incentive payments not only encourage physicians to participate, “but also provide additional resources that can be used to expand services beyond traditional [fee-for-service],” said Pittman in her prepared testimony. “ACOs … have used these incentive payments to reinvest in patient care, fund wellness programs, fund patient transportation and meals, hire patient-care navigators, and retain staff.”

Various medical specialties have struggled to transition to alternative-payment models, though. Both the American College of Surgeons and the American College of Emergency Physicians have submitted potential models to the Physician-Focused Payment Model Technical Advisory Committee, a federal advisory committee that makes recommendations to the Health and Human Services Department about stakeholder-developed payment models.

But according to written testimony from Anas Daghestani, the chair of the board of America’s Physician Groups, who is testifying Thursday, none of the models recommended by the advisory committee have been adopted by the HHS. Ryan McBride, congressional-affairs director for the American College of Emergency Physicians, said that “despite our best efforts,” that has been true for his group as well.

“And that’s not just ACEP,” McBride said. “There are other specialists that have put together at rather significant cost their own [alternative payment models] to try to participate. And the answer we’ve gotten is essentially, ‘We’re happy with fewer models, not more.’"

In a prepared statement to the subcommittee, the American College of Surgeons called on Congress to require that a portion of the CMS Innovation Center’s budget be used to test alternative-payment models recommended by the advisory committee.