Declining doctors' pay in Medicare is getting its most serious look in nearly a decade in the Senate, with a bipartisan push launched Friday by the Senate Finance Committee.
Doctors have grown especially vocal in recent years about falling Medicare reimbursement. Groups including the American Medical Association have estimated doctors were effectively getting paid 26% less in 2023 than in 2001 because the physician fee schedule set by the Centers for Medicare and Medicaid Services is not adjusted for inflation. Physicians have also called for more flexibility within the pay system.
Related: Doctors facing Medicare cut seek new payment system
"The way Medicare pays doctors for their work has not kept up with the times, and if it’s not working for doctors, it’s not working for the patients they help,” said Finance Committee Chair Ron Wyden (D-Ore.) in a statement laying out the committee's reform interests alongside its ranking Republican, Sen. Mike Crapo (R-Idaho).
The senators' white paper identifies several major areas where physician pay should be reformed — and boosted — with a particular emphasis on programs that could also save money, including:
- Creating pay updates that "ensure clinicians can own and operate their practices,"
- Encouraging "alternative payment models that reward providing better care at a lower cost,"
- Reexamining Medicare's quality measures,
- Improving primary care,
- Supporting chronic care benefits,
- Extending telehealth access
The senators also want to better treat chronic conditions they say are the biggest drain on Medicare.
The committee's ideas come just two days after Sen. Dr. Bill Cassidy (R-La.) and Sen. Sheldon Whitehouse (D-R.I.) introduced their own bill to boost primary care physician pay and separately asked doctors to weigh in on how to change Medicare reimbursement.
The Senate Finance Committee is not proposing fully formed solutions at this point, but offering up possibilities on which stakeholders can weigh in. Senators did not set a timeline for reforms, but Crapo said the paper is a key starting point for making those a reality.
One of the biggest questions lawmakers lay out is how to update pay on a yearly basis, possibly by linking it to inflation or a medical-specific inflation index.
The main factor used to adjust Medicare's physician fee schedule, the conversion factor, has been declining steadily based on factors written into law, including major reforms in 2015, and Congress has had to step in repeatedly with short-term boosts to keep doctors' pay from falling even faster.
The issue has begun to remind many of the annual "doc fix" that Congress had to carry out each year before 2015 under what was known as the sustainable growth rate, which was an even more stringent legislative formula meant to contain costs.
The Medicare Access and CHIP Reauthorization Act of 2015, generally referred to as MACRA, replaced that cost-containment system with a new pay method that includes the complicated Merit-based Incentive Payment System, or MIPS, and other alternative payment models employed by accountable care organizations, which pay bonuses or exact penalties to reduce costs.
Reworking the cost-saving aspects of MACRA and making them work better is another key area for the Finance Committee.
The senators note physicians and numerous analysts have complained about the bureaucratic burden the MIPS places on providers for a negligible benefit. The paper also recognizes the relatively slow uptake of alternative payment models.
Players in the alternative payment sector, such as the National Association of ACOs, praised the Senate efforts Friday.
"NAACOS supports considering alternatives to the current bonus structure, including ways to eliminate participation thresholds, and better updates than the current conversion factor," said NAACOS President and CEO Clif Gaus in a statement. "We look forward to working with the committee on reforming physician payment in ways that encourage more providers to participate in alternative payment models, including ACOs and other value-based care arrangements.”
Another issue is the Medicare budget neutrality policy, which requires changes that Medicare wants to make within the physician pay system to be offset by cuts elsewhere if they cost more than $20 million. For instance, if most doctors qualify for merit-based bonuses, they can only come from penalties paid by the much slimmer number of underperforming doctors. The Finance Committee's paper notes that the biggest bonuses in 2021 were just 2.34%.
The Medical Group Management Association, which represents physicians' groups, said matching inflation and reforming budget neutrality were equally important.
"Paramount is the need for an annual physician payment update commensurate with inflation and modernization of the antiquated Medicare budget neutrality policies that can only be described as ‘robbing Peter to pay Paul,’" said a statement from MGMA's senior vice president of government affairs, Anders Gilberg.
