Doctors have long lamented that Medicare fails to pay enough to meet rising costs. Key members of the Senate Finance Committee said Thursday they agreed, and pledged to do something about it.
"The way traditional Medicare pays physicians to manage and treat these conditions has not kept up with the times," Finance Committee Chair Ron Wyden (D-Ore.) said at a hearing on bolstering pay for treating chronic care. "It is now time to act once more."
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“Today’s hearing highlights the urgency of advancing durable clinician payment reforms — both for frontline medical providers and, more importantly, for patients," Finance Committee ranking member Mike Crapo (R-Idaho) said.
Lawmakers and witnesses ran through a litany of problems, starting with declining pay for doctors.
"In inflation-adjusted terms, Medicare physician fee schedule payments have declined by more than 25% over the past two decades, even as clinicians continue to face skyrocketing costs for overhead, equipment, supplies and staffing," Crapo said.
Medicare's Merit-based Incentive Payment System — known as MIPS — is rigid and complex and presents barriers to higher physician compensation, senators and witnesses said. Congress created MIPS in the Medicare Access and Children's Health Insurance Program Reauthorization Act of 2015 to replace the sustainable growth rate formula.
The Centers for Medicare and Medicaid Services implemented a modest cut to Medicare physician payments this year over protests from medical societies and lawmakers. CMS is beholden to federal law that requires annual adjustments to Medicare reimbursements to be budget-neutral, meaning new spending above $20 million must be offset by cuts elsewhere, which limits the agency's flexibility. Congress partially reversed the 2024 pay cut last month.
"Congress should, at a minimum, increase the budget neutrality trigger threshold from $20 million to $100 million and index it annually to account for inflation," said Dr. Patricia Turner, CEO and executive director of the American College of Surgeons.
Sen. Debbie Stabenow (D-Mich.), a member of a bipartisan working group on physician pay, signaled strong agreement with the concept.
"It seems to me the budget neutrality requirements — I understand what happened, why that happened — but it doesn't make sense to me when we're in the context of services for people that in order to incentivize certain services we have to cut other services," Stabenow said. "I hope we're going to really, really focus on that."
Flexibility under fee-for-service Medicare, especially compared to Medicare Advantage, was another focus, with both lawmakers and witnesses arguing that traditional Medicare rules make it difficult for providers to embrace more comprehensive, cost-saving treatment strategies.
Dr. Steven Furr, president of the American Academy of Family Physicians, argued that Medicare favors specialists over primary care doctors and that smaller medical practices are less able to achieve quality bonuses under MIPS.
"Traditional Medicare under-invests in primary care," Furr said. "Low primary care payment rates and a system that rewards volume over value means physicians are pressured to see as many patients as possible. Meanwhile, overwhelming administrative burden takes significant time away from our patient care."
Dr. Amol Navathe, a professor at the University of Pennsylvania's medical and business schools, said doctors' offices can spend more money navigating complicated billing codes than they get paid for some services.
"The administrative cost to bill for a visit is about $20. That’s more than the $15 physicians get paid for a virtual check-in visit," Navathe said. "I sometimes call this 'death from a thousand codes.'"
Several senators noted that Medicare Advantage plans have greater flexibility to coordinate care and suggested building those capabilities into fee-for-service Medicare "That could include steps such as reducing or eliminating cost-sharing for care coordination services," Wyden said.
"It also has to include empowering primary care," Wyden said. Primary care doctor shortages in some regions can partly be traced to low Medicare reimbursements, he said. "Primary care providers need to be valued and compensated more fully by Medicare," he said.
Wyden also criticized Medicare Advantage, saying massive marketing budgets, overbilling and high profits suggest the program is siphoning resources from traditional Medicare.
"Too many insurance companies are playing too many games with these rules, particularly in terms of coding games with Medicare's payment rules, to maximize their bottom line but do little or nothing for seniors," Wyden said.
Although senators appeared open to revamping the Medicare physician reimbursement system, they did not outline concrete steps forward. Lawmakers face numerous obstacles in the near term, starting with 2024 being an election year and Congress holding off on major policymaking before the November vote.
Congress also faces year-end deadlines for a slew of healthcare priorities that already have been put on the back burner. Moreover, legislation tackling something as significant as Medicare payment policy would need to run through several congressional committees, which would hold hearings and engage in intense negotiations over what, if anything, to do.