On Thursday, Medicare payment advisors unanimously approved a recommendation to update hospital fees by 2% in fiscal year 2023 and leave the payment schedule for doctors the same next year.
But members of the Medicare Payments Advisory Panel continued to express concerns about the long-term viability of the current physician pay schedule model, which they say has not kept pace with inflation at a particularly volatile time for health care providers.
MedPAC annually evaluates the adequacy of Medicare payments by sector. The commission is looking into factors such as access to health care, access to capital, and Medicare payments. To draft recommendations for 2023, staff used data from 2020, which is colored by the public health emergency caused by COVID-19. But MedPAC believes that much of the impact of PHE on the healthcare system will be temporary and therefore should not be addressed by updating the payment schedule.
The Commission agreed that this should result in a renewal of hospital fees by an amount determined under current law, which is expected to be 2% by 2023.
However, Commissioner Brian DeBusk, CEO of medical device maker DeRoyal Industries, noted that 2023 will mark the second year of a sharp reversal in hospital labor and material costs. The Centers for Medicare and Medicaid Services Market Basket, which reflects the inflation faced by providers and is used to upgrade the hospital payment system, will need to reflect dynamics such as increased care costs, supply chain backup and much more.
“I hope that hospitals and other authorities will provide CMS with the information they need… I think it will become more clear that these fundamental costs have changed, and changed dramatically,” he said.
MedPAC also voted to recommend against increasing physician pay under the 2023 Physician Pay Schedule, also in line with the law, despite concerns that the proposal would underpay providers in the current high inflation environment.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) mandates a 0% pay increase for physicians based on a pay schedule, instead offering an increase through quality pay programs.
The MedPAC staff report on the adequacy of pay for physicians does not show that a derogation from the law is needed in 2023, but MedPAC needs to think about deeper, longer-term model fixes, said Commissioner Dr Lawrence Casalino, Professor Weill. This is stated in the message of the Cornell Graduate School of Medical Sciences.
According to DeBusk, 45% of a physician’s fee schedule is practice costs or resources related to the provision of medical services in a medical practice. Because the fee table does not have a market basket update that takes into account inflation, as the hospital payment system does, hospitals may see an update that is significantly different from doctor updates. This could encourage more doctors to seek work in hospitals, he said.
“Hiring doctors in hospitals may or may not be good. But if it does, it should be for good reasons, not because it’s driven by differentiated pay upgrades,” Casalino said, agreeing with DeBusk.
Commissioner Lynn Barr, chief executive of Caravan Health, which directs health care providers based on value, stressed that Congress must continue to intervene until a more permanent payment schedule fix is in place. Last month, Congress passed a 3 percent pay increase for physicians paid by health care providers.
“I’m a little worried about slapping people who are really on the front lines, but that’s what it is,” Barr said.
Indeed, service providers are already opposed to the MedPAC proposal.
“It’s hard to think of a more misguided recommendation…Physicians are facing massive staffing shortages and skyrocketing costs. Ignoring this reality, MedPAC is essentially recommending that Congress do nothing to keep Medicare payments in line with inflation,” Anders Gilberg, Medical Group Management Association senior vice president of government relations, said in a statement.
MedPAC Chairman Michael Cernuy, a professor at Harvard Medical School, indicated that the commission could discuss broader issues with physician pay schedules in the future.
MedPAC also voted unanimously in favor of recommending a 5% reduction in the base payment for skilled nursing facilities, inpatient rehabilitation facilities, and home care agencies. The commission also proposed increasing compensation for long-term care hospitals and keeping rates unchanged for hospice providers. MedPAC has recommended that the base fee for dialysis facilities be updated to the amount set by current legislation and that the 2022 conversion factor for ambulatory surgical centers be removed.
In addition, MedPAC recommended requiring home care agencies to report telemedicine services provided over a 30-day period, requiring clinicians to track audio-only services through Medicare applications, and requiring outpatient surgical centers to report cost data to help with future updates. payments.