The American Medical Association adopted new policy language directing a comprehensive advocacy campaign for Medicare payment reform at its Annual Meeting of House Delegates in Chicago on June 14th.
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The new language was largely informed by a resolution authored by the Texas Medical Association and an advocacy push spearheaded by its new president, Dr. Rick Snyder.
Snyder said the issue stemmed from the fact that the Medicare physician fee schedule is calculated to be budget neutral, and not tied to inflation, the consequences of which would further contribute to hospital consolidation of physician practices.
“You’re seeing a lot of hospitals buying practices, and when that happens, they get to apply the Hospital Outpatient Prospective Payment System, which is often two-and-a-half to three times what the [Medicare B] physician fee schedule is.
For example, if I do an echocardiogram in my office, it’s about $150 in Dallas County. If we were bought by a hospital practice, it would be about $500. Same office, same equipment, same patient, same doctor reading it, and the same [echocardiogram technician].
Last year, national health expenditures for this country was $4.4 trillion. By 2030, it’s going to be $6.7 trillion, 49 percent more. We can’t afford the healthcare we’re asked to provide now. Despite having an unacceptably-high uninsured rate, on a per capita basis, we easily outspend every other western country, and almost all [countries] by two to three times.”
— Dr. Scott Snyder, president, Texas Medical Association
In April, a group of physician Congressional leaders introduced the Strengthening Medicare for Patients and Providers Act, which would tie inflation to annual Medicare physician payment rate updates.
According to the Congressional Budget Office, the inflation-adjusted physician payment for the Medicare B physician fee schedule declined 26 percent from 2001 through April. In that time, both the consumer price index and the Medicare Economic Index (the cost of running a medical practice) grew by 73 percent and 47 percent, respectively.
In March, the Medicare Advisory Payment Commission, a Congressional Medicare advisory committee, recommended a 1.45 percent increase to 2024 physician payment rates after rates were cut by 2 percent this year.
The Centers for Medicare and Medicaid Services’ Medicare B physician fee schedule has been decreasing steadily each year with the conversion factor falling from $34.61 in 2022 to $33.08 in 2023.
Meanwhile, payments to inpatient/outpatient hospitals and skilled nursing facilities have kept up with the pace of inflation. In an interview following the AMA meeting, Snyder told State of Reform that Medicare payment reform to adjust for inflation was an urgent federal policy matter for physicians.
Addressing these cost-efficiency issues is central to AMA’s payment system reform advocacy, which includes site neutrality; the policy requiring Medicare Part B coverage to pay the same amount for the same outpatient services, regardless of where they are performed.
Snyder said enacting site neutrality could save up to $300 billion over 10 years, an amount that could be used to fix the current physician fee schedule. Doing so would help more private practice physicians remain independent of hospital systems.
“We’ve got to find a way to advocate for cost efficiency to preserve access, and it’s got to be timely access to high-quality care that’s affordable. In the state of Texas, we have a lot of geographic barriers to access, so rural broadband will be one of the key things. A lot of people talk about expanding Medicaid coverage—the problem with the Affordable Care Act (ACA) is a lot of hospitals [and] doctors don’t take that. So again, it’s got to be more than coverage. It’s got to be meaningful access. Just adding more people on to the ACA is like throwing more chairs on the Titanic. We need more lifeboats.”