• In The Trenches

    Renewing Our Push to Correct Medicare Physician Payment

    July 28, 2022, 5:00 p.m.— CMS this month issued its 2023 proposed Medicare physician fee schedule and Quality Payment Program proposed rule. It’s about 2,000 pages long, and the Academy goes over it very carefully in order to formulate a detailed response. In the meantime, we’ve published a summary of the rule for members. 

    The word "Medicare" on a tablet surrounded by a stethoscope, eyeglasses and needles

    Let me summarize that summary here, though: The Medicare physician payment system is still broken. Statutory budget-neutrality requirements and prohibitions on annual payment updates to account for inflation will, without intervention from Congress, continue to hurt primary care practices and undermine patient care.

    You’ll recall from recent times that the “intervention from Congress” part of this cycle adds frustrating uncertainty, particularly given that the results have been year-to-year patchwork, despite the obvious need for wholesale Medicare payment reform. We, along with numerous other medical and specialty groups, have long since diagnosed what’s wrong and explained the harms the nation can expect in the absence of meaningful change. Our health care system needs holistic care, not more aspirin and gauze.

    Conversion Factor

    The proposed 2023 MPFS sets next year’s conversion factor (the amount Medicare pays per relative value unit) at $33.08 — 4.5% lower than 2022’s conversion factor. This reflects a -1.55% budget-neutrality adjustment and the fact that this year’s 3% positive adjustment from Congress will have expired.

    Evaluation and Management Visits

    The rule as written would adopt most of the changes in coding and documentation for “Other E/M” visits (e.g., hospital inpatient, hospital observation, emergency department, nursing facility, home or residence services) recommended by the AMA’s CPT and RUC panels. These changes would result in an overall increase in relative value units, which — due to statutory budget neutrality requirements — CMS must offset by decreasing the conversion factor.

    Medicare Economic Index

    The Medicare Economic Index, which measures changes in the market price of the inputs used to furnish physician services, remains primarily based on data from 2006. That’s obviously not great. The 2023 MPFS proposes to rebase and revise the MEI using 2017 data, which CMS says is the most recent complete set of figures available. Our summary goes into a little detail about the formulation beyond that. We’re still analyzing how using new MEI cost weights to set rates will affect family medicine, and CMS wouldn’t enact this for 2023, pending stakeholder feedback. But the AAFP, the AMA and more than 100 other medical societies just told Congress that the Medicare physician fee schedule should receive a baseline positive annual update that reflects inflation in practice costs.

    Alternative Payment Models and More

    The rule proposes changes to the Medicare Shared Savings Accountable Care Organization Program, which is meant to allow more practices to move into ACOs without unfair penalties. This may help family physicians in rural and underserved communities join and succeed in shared savings programs. Good! But, yet again, changes to alternative payment model participation rules required by federal law could undermine these positive proposals. In particular, the Quality Payment Program has failed to adequately support clinicians in the move to APMs, exacerbating the need for comprehensive Medicare physician payment reform.

    The 5% bonus, established by 2015’s Medicare Access and CHIP Reauthorization Act, has been vital to clinicians making the investments necessary to escape fee-for-service practice. By statute, that bonus will expire after the 2024 payment year, which means there will be no bonus based on participation in the 2023 performance year. That’s bad enough. Worse, the 2023 MPFS proposed rule raises the qualifying participant threshold (determining who qualifies to participate in an advanced APM at all) to such a prohibitive degree that, by the agency’s own estimates, thousands of AAPM clinicians won’t be able to continue in their models. Untold less-experienced clinicians eager to move into APMs will be locked out.

    That is unless — here we go again — Congress steps in.

    In this case, the urgent action we support is passage of the Value in Health Care Act of 2021, a bipartisan bill that would tackle these issues and roll out other important reforms to strengthen Medicare’s value-based care models and ACOs.

    What Else?

    There’s good news here, too. The proposed rule would

    • annually update payment amounts for Part B vaccine administration and continue the additional payment for at-home COVID-19 vaccination, in line with our advocacy;
    • maintain Medicare telehealth flexibilities for 151 days after the COVID-19 public health emergency, as required by legislation for which the AAFP advocated;
    • delay the in-person requirements for tele-mental health visits, including those furnished by rural health clinics and federally qualified health centers; and
    • enable certain behavioral health clinicians to help manage patients’ behavioral health needs as part of the primary care team.

    I encourage you to read the summary linked at the top of this post. The Academy will comment at length on those and other topics before the Sept. 6 due date. The final rule will be released around Nov. 1 and will take effect on Jan. 1, 2023. Watch this space for more information.  

    Contact Your Members of Congress

    As we again press Congress to do the right thing for primary care and the U.S. health care system, I’m asking you to add your voice to the fight by clicking to join our Speak Out campaign. In fact, the August congressional recess is an excellent moment for you to sit down with your lawmakers as they return to your district. Building relationships at this level pays powerful dividends for all of family medicine, and it’s not hard to do. Visit the AAFP Grassroots Advocacy webpage to get started. 


    The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.