• In The Trenches

    Congress Asked How to Fix Physician Payment. We Answered

    Nov. 18, 2022

    By Stephanie Quinn
    Senior vice president of advocacy, practice advancement and policy

    When Congress frames a set of questions about physician payment by admitting that the Medicare Access and CHIP Reauthorization Act has been “plagued” by “logistical challenges,” the main difficulty in responding is simply to stop nodding long enough to type.

    Capitol in winter

    You can read here the Academy's forceful reply to the recent request for information I’m talking about, which was meant to gauge the state of various payment reforms enacted with MACRA in 2015, but I’ll sum up our policy recommendations this way: Things must get better, and soon.

    The good news is that Congress is asking, and that its questions do indeed show an awareness of several problems. The Medicare payment system, lawmakers wrote, “has failed to maintain levels of provider reimbursement that adequately incentivize high-quality care.” The RFI adds: “As we seek to further the transition toward value-based care, Congress should consider systemic reforms to our health care financing.”


    Of course, when this call to stakeholders went up, the AAFP was already tapping shoulders and filling email inboxes with renewed calls to stabilize the Medicare payment system, a campaign necessitated by the 2023 Medicare physician fee schedule proposed rule. That rule was finalized Nov. 1, and it locks in an untenable cut to physician pay that, as the last two years’ MPFS rules did, will require congressional intervention to stave off. We’re working on that problem. Hard.

    The Academy’s response to the lawmakers asking after MACRA presented a parallel opportunity to restate our biggest advocacy priority today: stopping these forthcoming cuts and solving the underlying problems with Medicare’s physician payment system so we can end this yearly ritual. Specifically, we called for swift passage of the Supporting Medicare Providers Act of 2022 (H.R. 8800) to avert the 4.5% conversion factor reduction in the MPFS final rule. Failing to make such a fix threatens the financial viability of family medicine practices — in fact, any medical practice serving Medicare beneficiaries. We noted that the budget neutrality requirement baked into Medicare payment policy — that is, the mandate that any payment increase for a Medicare service be offset by reducing some other service — is causing this conversion factor headache.

    Besides budget neutrality, we added, Medicare physician pay continues to suffer because federal law has temporarily frozen annual inflationary updates for the Medicare physician fee schedule, even as other Medicare facilities and provider types continue to benefit from these annual updates. An AMA analysis reports that Medicare physician payment has been reduced by 20% when adjusted for inflation over the past 20 years. This while the costs of taking care of patients — employing a team, leasing space, purchasing supplies and equipment — has risen. These pressures are slowing or, for many, preventing outright the transition into the new payment models at the heart of MACRA’s intent. Our letter put it this way: “Subjecting physicians to passive payment cuts by failing to provide any inflationary update undervalues the foundational and important role that physicians play in helping their patients navigate the broader health care system.

    “MACRA has fallen short of supporting physicians moving into alternative payment models. While MACRA was designed to shift financial incentives away from fee-for-service payment into alternative payment models, the aforementioned decreases in FFS payments under the Medicare physician fee schedule have inhibited most physician practices from making the necessary investments that would allow them to successfully move into alternative payment models.”

    Amen again.

    And while the AAFP remains bullish on value-based care and strongly supports the movement toward APMs that better support the provision of comprehensive primary care, it’s clear that the Quality Payment Program needs a refresh. We put it bluntly to lawmakers: The QPP does not adequately pay for Medicare physician services. Our letter went into some detail about why this is happening, including a discussion of woefully insufficient Merit-based Incentive Payment System positive payment adjustments, but a lot of you know firsthand. In this space, though, I want to emphasize that this failure is likely having a substantial negative effect on public health by undervaluing the care delivered by physicians who treat the most complex and challenging patient populations. Many of you know this firsthand as well.

    Beyond that, we added, MACRA so far

    • isn’t successfully moving physicians into APMs that prioritize quality and value over volume;
    • is pushing practices to drastically accelerate from FFS to advanced APMs without regard to appropriate risk level;
    • isn’t streamlining Medicare’s existing quality programs or simplifying reporting requirements, as was the goal;
    • is overly prescriptive and complex, creating unnecessary burdens; and
    • has failed to appropriately recognize adoption of other payer APMs.

    Also alarming: As I told you in July, the 2023 MPFS proposed rule raises the qualifying participant threshold (determining who qualifies to participate in an advanced APM at all) to a prohibitive degree. By the agency’s own estimates, thousands of clinicians participating in advanced APMs won’t be able to continue in their models, to say nothing of less-experienced clinicians who might otherwise have made the move. At the same time, the 5% AAPM bonus will end, removing a major incentive for physicians to move into AAPMs. So this letter was another opportunity to ask that Congress step in and stop both of these mistakes, which defy MACRA’s spirit.

    Beyond that important advocacy, the Academy recommended a number of ways to encourage MACRA’s evolution.

    For one thing, we said, its prospective payment approaches must center on increased investment in primary care. “Adequately and sustainably supporting physician-led, team-based primary care is essential to the long-term success of the U.S. health care system,” is how we put it. Among other things, that means Congress and HHS should

    • increase Medicare APM participation opportunities;
    • align models across payers;
    • ensure that physicians caring for rural and underserved populations can successfully participate in APMs; and
    • modernize FFS payment for primary care, starting with a sustainable FFS Medicare payment system.

    Your Turn

    Please add your voice to our push to avert forthcoming Medicare physician payment cuts by urging Congress to increase the 2023 Medicare conversion factor.


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    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.