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Medicare faces calls to stop physician pay cuts in E/M overhaul


Lawmakers weigh in

Lawmakers in both political parties have asked CMS to reconsider the offsets in the E/M overhaul.

Rep. Michael C. Burgess, MD (R-TX), who practiced as an obstetrician before joining Congress, in October introduced a bill with Rep. Bobby Rush (D-IL) that would provide for a 1-year waiver of budget-neutrality adjustments under the Medicare physician fee schedule.

Burgess and Rush were among the more than 160 members of Congress who signed a September letter to CMS asking the agency to act on its own to drop the budget-neutrality requirement. In the letter, led by Rep. Roger Marshall, MD (R-KS), the lawmakers acknowledge the usual legal requirements for CMS to offset payment increases in the physician fee schedule with cuts. But the lawmakers said the national public health emergency allows CMS to work around this.

“Given the effects of the COVID-19 pandemic, we believe you have the regulatory authority to immediately address these inequities,” the lawmakers wrote. “There is also the need to consider how the outbreak will be in the fall/winter months and if postponing certain elective procedures will go back into effect, per CMS’ recommendations.

“While we understand that legislative action may also be required to address this issue, given the January 1, 2021 effective date, we would ask you to take immediate actions to delay or mitigate these cuts while allowing the scheduled increases to go into effect,” the lawmakers said in closing their letter. “This approach will give Congress sufficient time to develop a meaningful solution and to address these looming needs.”

Another option might be for CMS to preserve the budget-neutrality claim for the 2021 physician fee schedule but soften the blow on specialties, Brian Fortune, president of the consulting firm Farragut Square Group, told Medscape Medical News. A former staffer for Republican leadership in the House of Representatives, Fortune has for more than 20 years followed Medicare policy.

The agency could redo some of the assumptions used in estimating the offsets, he said, adding that in the draft rule, CMS appears to be seeking feedback that could help it with new calculations.

“CMS has been looking for a way out,” Fortune said. “CMS could remodel the assumptions, and the cuts could drop by half or more.

“The agency has several options to get creative as the need arises,” he said.

“Overvalued” vs “devalued”

In its comment to CMS, though, MedPAC argued strongly for maintaining the offsets. The commission has for several years been investigating ways to use Medicare’s payment policies as a tool to boost the ranks of clinicians who provide primary care.

A reshuffling of payments among specialties is needed to address a known imbalance in which Medicare for many years has “overvalued” procedures at the expense of other medical care, wrote Michael E. Chernew, PhD, the chairman of MedPAC, in an October 2 comment to CMS.

“Some types of services — such as procedures, imaging, and tests — experience efficiency gains over time, as advances in technology, technique, and clinical practice enable clinicians to deliver them faster,” he wrote. “However, E&M office/outpatient visits do not lend themselves to such efficiency gains because they consist largely of activities that require the clinician’s time.”

Medicare’s payment policies have thus “passively devalued” the time many clinicians spend on office visits, helping to skew the decisions of young physicians toward specialties, according to Chernew.

Reshuffling payment away from specialties that are now “overvalued” is needed to “remedy several years of passive devaluation,” he wrote.

The median income in 2018 for primary care physicians was $243,000 in 2018, whereas that of specialists such as surgeons was $426,000, Chernew said in the letter, citing MedPAC research.

These figures echo the findings of Medscape’s most recent annual physician compensation report.

As one of the largest buyers of medical services, Medicare has significant influence on the practice of medicine in the United States. In 2018 alone, Medicare directly paid $70.5 billion for clinician services. Its payment policies already may have shaped the pool of clinicians available to treat people enrolled in Medicare, which covers those aged 65 years and older, Chernew said.

“The US has over three times as many specialists as primary care physicians, which could explain why MedPAC’s annual survey of Medicare beneficiaries has repeatedly found that beneficiaries who are looking for a new physician report having an easier time finding a new specialist than a new primary care provider,” he wrote.

“Access to primary care physicians could worsen in the future as the number of primary care physicians in the US, after remaining flat for several years, has actually started to decline,” Chernew said.

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