Medicare physician pay is unsustainable, AMA says

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The American Medical Association and others are calling on Congress to stop the advanced Alternative Payment Model bonus payment cut that is scheduled to expire at the end of the year for most physicians.

The APM 5% incentive payment under the Medicare Access and CHIP Reauthorization Act (MACRA) was originally set to expire at the end of 2022, but the Consolidated Appropriations Act of 2023 extended the bonus at 3.5% for the 2023 performance year, according to the AMA.

Only Advanced APM participants who meet certain thresholds will receive the 5% Medicare payment incentive. To qualify, physicians participating in an Advanced APM must receive either 50% of their payments or have 35% of their patients affiliated with the APM. 

This payment threshold is set to increase from 50% to 75% at the end of 2023, which will make it more difficult, if not impossible, for physicians to qualify for positive payment updates in the coming years, the AMA said. 

Also, physicians face up to 9% in Medicare payment penalties under the Merit-based Incentive Payment System (MIPS), which is also a part of MACRA. 

The AMA said that in response to advocacy from the AMA and others, physicians may now apply for an "Extreme and Uncontrollable Circumstances" hardship exception to avoid such penalties, which would apply in 2025 based on the 2023 performance period.

On Monday, the AMA said the first pillar of the AMA Recovery Plan for America's Physicians is reforming Medicare physician payment, and that push is more important than ever with impending Medicare pay cuts coming in 2024.

The Centers for Medicare and Medicaid Services is proposing a 3.36% cut to Medicare physician payment in 2024. This stems from a 1.25% reduction from a temporary legislative update and from a negative budget neutrality adjustment. The 2024 cut follows a 2% cut in 2023.

"Physician payment before this proposed cut was already unsustainable, and it continues to get worse," said Jennifer Hananoki, assistant director on the AMA's federal affairs team. 

Physicians participating in Advanced APMs must take on risk for quality and cost results, use electronic health record technology and be evaluated on multiple quality measures. 

WHY THIS MATTERS

The AMA is calling on Congress to prevent a scheduled 3.5% payment cut for physicians participating in Advanced Alternative Payment Models and the corresponding revenue threshold jump at the end of 2023 by passing an updated version of the Value in Health Care Act before the end of the year.

Without Congressional intervention, the future sustainability of APMs is in jeopardy, the AMA said.

At the National Press Club on October 25, AMA president Dr. Jesse M. Ehrenfeld talked about physician burnout including their suicide risk, government intrusion into healthcare decisions, consolidation that is giving more power to hospitals and less autonomy to patients and doctors. and plummeting Medicare payments.

During the last 20 years, Medicare reimbursement rates have been shrinking. Adjusting for inflation, payment has dropped by over 26%, he said.

When doctors lack the resources they need, they close their offices, or work fewer hours, have antiquated equipment and limit or stop the number of Medicare patients they see, he said.

Solutions include bipartisan bills pending in Congress, meaningful Medicare reform, prior authorization reform, addressing physician shortages through bills for training, student loan support and a pathway for foreign physicians to work in the United States.

"If we don't get it done by end of year, there will be a 3.36% cut to Medicare payments to physicians," he said. "We're optimistic they can get it done."

THE LARGER TREND

In July, the American Hospital Association, the American Medical Association and 15 other provider groups wrote a letter to lawmakers endorsing the Value in Health Care Act of 2023.

The bipartisan bill makes reforms to alternative payment models. While MACRA was a step in the right direction towards value-based care, the transition has been slower than anticipated, the groups said. The Value in Health Care Act strengthens that movement to link financial performance to quality of patient care. 

It provides a multiyear commitment to reforming care delivery by extending MACRA's 5% advanced Alternative Payment Model incentives, which are scheduled to expire at the end of 2023. It also gives CMS the ability to adjust APM quality thresholds and removes revenue-based distinctions that disadvantage rural and safety-net providers, the letter said.

"The bill also improves financial benchmarks so that APM participants are not penalized for their own success," the groups said.

The AMA is holding an AMA Advocacy Insights Webinar Series episode on the status of payment reform on Friday, November 3.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org