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Recent congressional discussion has focused on improving value-based care and challenges of Medicare Part B

Aug. 9, 2024 (ACP) -- The �ܼ�����ˮ��̳ has long advocated for physician payment reform and improving patient access to value-based care in a more sustainable practice model for physicians. Recent congressional activity shows increased attention on this topic.

“Just since March, there have been close to a half-dozen hearings and two requests for information,” said David Pugach, ACP vice president for governmental affairs and public policy. “Also, several bills have been introduced that offer various improvements to the Physician Fee Schedule and promote participation in alternative payment models.”

ACP is asking its members to during the August 2024 recess to ask for their support of two bills. The first is the Telehealth Modernization Act of 2024, which would extend important telehealth flexibilities that are set to expire at the end of this year for two more years.

“Expiring provisions include removing arbitrary geographic restrictions on where a patient must be located in order to utilize telehealth services, enabling patients to continue to receive telehealth services in their homes, and allowing health centers and rural health clinicians to provide telehealth services,” Pugach explained.

The second bill is the Physician Fee Schedule Update and Improvement Act. “This bipartisan legislation would raise the threshold to implement budget-neutral payment cuts in Medicare to $53 million and use cumulative increases in the Medicare Economic Index to update the threshold every five years,” Pugach said.

Meanwhile, as Congress focuses more on the payment system's failures, ACP is continuing to work closely with U.S. representatives, senators and their staffs to advocate for patients and physicians.

“Our message is that patient access to care and the stability of physician practices have been put at risk by systemic flaws in the Medicare payment system and insufficient funding for physician payment, particularly for primary care services,” Pugach said. “ACP has been calling for legislation to stabilize the Physician Fee Schedule, revise budget neutrality requirements, ensure accurate utilization estimates for new codes, support increased payment for primary care services and expand the primary care workforce, all of which will lead to a healthier patient population.”

One major problem is the budget neutrality requirement that is designed to constrain growth and spending in Medicare. “Under this requirement, new codes or payment increases for physician services in the Physician Fee Schedule must be offset by an arbitrary across-the-board reduction for all services paid under the fee schedule,” Pugach said. “This problem is exacerbated by the Centers for Medicare & Medicaid Services routinely overestimating the utilization of new Medicare billing codes. When this happens, the cut is more than is actually required. Reductions to physician payments have a long-term impact, so an inflated cut based on overestimated utilization has a compounded effect on physician payment.”

Another problem is that Medicare payment rates for physicians have not been updated for inflation in a number of years. “Medicare Part B, which includes the Physician Fee Schedule, is the only part of Medicare that does not provide inflationary updates,” Pugach explained. “When accounting for inflation, physician payment rates have decreased by nearly 30 percent since 2001. This has led to instability for medical practices and made it more difficult for physicians to meet their practice expenses. It also contributes to staffing shortages and service limitations that potentially result in longer wait times or other disruptions impacting patient care.”

In the past few months, ACP made recommendations to a Senate Finance Committee, which released a white paper titled “Bolstering Chronic Care Through Physician Payment: Current Challenges and Policy Options in Medicare Part B,” and to a House Ways and Means subcommittee, which is focusing on improving value-based care.

ACP also sent a letter to Sens. Sheldon Whitehouse and Bill Cassidy praising them for introducing the Pay PCPs Act, which proposes a hybrid payment model. “Our hope is that their efforts will strengthen the primary care workforce and improve patient care,” Pugach said.

He added: “The legislative process is usually a long-term endeavor, and the calendar is not working in our favor. Congress is currently only scheduled to have about 40 legislative days between now and the end of the year. While the number of days that Congress is in session could change, moving comprehensive payment reform this year will be a challenge. However, at a minimum, these efforts provide a strong starting point for next year.”

He noted that advocacy to reform the payment can “proceed on parallel tracks” in ACP's lobbying for a fee schedule fix. “There can be a long-term effort to advance systemic reforms. At the same time, lawmakers are cognizant of the need to advance any improvements that can move in the near term,” Pugach said. “ACP is pushing for Congress to act this year to improve physician payment while also working to make sure that Congress understands that the policy details in any longer-term comprehensive proposal will benefit internal medicine physicians and their patients. It is important to not just see legislation advance, but to make sure the legislation is structured to achieve its intended objectives.”

More Information

Visit the to contact your members of Congress and ask them to support legislation that would maintain telehealth coverage and provide important policy updates to the PFS.

Back to the August 9, 2024 issue of ACP Advocate