Providers vow to fight Medicare pay freeze

The lobbying began just minutes after CMS released a physician payment rule for next year that doesn’t include pay raises for doctors, physician assistants, nurse practitioners and others.

Provider groups re geared up for a rerun of the battle over this year’s physician fee schedule, which originally financed a pay increase for primary care providers by cutting payments to specialists. Congress intervened after a sustained lobbying effort that culminated in an across-the-board 3.75% pay rise for the 2021 calendar year, at a cost of $3 billion to taxpayers. CMS issued the proposed rule for 2022 on Tuesday.

The payment boost this year enabled Medicare to pay more for office visits and avoid larger cuts for specialists. But they were only possible because Congress decided to increase Medicare spending rather than adhering to the program’s budget neutrality requirement.

Now that the short-term boost is due to expire, CMS has proposed a 3.75% reduction in the physician fee schedule’s conversion factor, which is used to calculate physician payments, for next year. As a result, total provider payments won’t increase in 2022 unless Congress allocates additional money.

Specialists are particularly upset about the pay freeze since they would bear the brunt of the costs.

“Today’s proposed rule maintains the cuts to surgical care that Congress stopped last year. These cuts harm the care patients need and deserve, which is the opposite of what CMS is trying to achieve,” American College of Surgeons Executive Director Dr. David Hoyt said in a joint statement from the Surgical Care Coalition.

Moreover, physicians and other providers could face additional cutbacks unless Congress puts a stop to Medicare sequestration and other budget rules that require spending reductions, said Gayle Lee, director of government relations and public policy for the Association of American Medical Colleges.

These payment issues are nothing new, said Paul Keckley, an industry consultant and managing editor of The Keckley Report. Providers have long complained that Medicare payment rates haven’t kept pace with inflation. But many experts say that’s intentional because their rates were already too high.

“They’re never happy,” Keckley said.

CMS’ payment update is in line with the 0% raise the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) dictates. The Medicare Payment Advisory Commission, which advises Congress on Medicare issues, recommended in its March report that Congress continue with the MACRA payment policy after its analysis determined that total payments to clinicians were adequate.

Providers were happy with CMS’ plan to pay for telehealth through 2023 and allow the use of audio-only telehealth services in some instances.

“MGMA is encouraged that CMS heeded our call to expand coverage for audio-only mental health services and views this proposal as a positive step to increase access to vulnerable populations that would otherwise go without care,” Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association (MGMA), said in a news release.

However, some provider groups worry that requiring in-person visits could make it too difficult to offer audio-only mental health services. That’s something they’ll try to address in the telehealth legislation making its way through Congress, Lee said.

In addition, CMS’ cautious approach to telehealth could signal that the agency expects its use to sink below pandemic or even pre-pandemic levels, Keckley said.

“I don’t think they’re bullish on telehealth. That’s a bit of a surprise for the investor world,” he said.

But other experts don’t see CMS backtracking on telehealth. Instead, President Joe Biden’s administration might be giving Congress room to negotiate broader telehealth expansion.

“That has more staying power than regulation. They’re trying not to gum up the works,” said Fred Bentley, a managing director at the consultancy Avalere Health.