Death by a Thousand Cuts: TMA Touts Medicare Payment Reform
By Emma Freer Texas Medicine November 2022


The infamous “SGR” may be dead, but as many physicians can attest, it appears someone forgot to bury the hatchet that keeps chopping Medicare physician payments and continues to wound practices each year. 

The 2023 proposed Medicare physician fee schedule is no different – except the cuts appear to be nicking in the form of incessant tweaks to the quality, technology, and e-prescribing programs that also sting practices trying to keep up and stay viable.  

There are some potentially bright spots in the 2023 draft that propose to expand access to telemedicine and behavioral health care, and make certain value-based care initiatives more accessible.  

But Texas Medical Association President Gary Floyd, MD, says that’s all overshadowed by the threat of deepening pay reductions that put practices – and patients’ access to care – in jeopardy and require the full force of TMA’s advocacy to prevent.  

“Continued cuts, year after year, without taking into effect inflation and the increased cost of doing business … will impact physicians to the point where they will have to stop taking care of Medicare patients to keep their practices running,” he told Texas Medicine

The final 2023 Medicare physician fee schedule is expected this month, and most provisions will take effect Jan. 1. However, the annual rigmarole reminiscent of the sustainable growth rate (SGR) has TMA, the American Medical Association, and other state medical and national specialty societies calling for wholesale, once-and-for-all reform.  

“In addition to immediately addressing the forecasted cuts in 2023, TMA calls on Congress and policymakers to provide stable and predictable Medicare physician payments,” Dr. Floyd wrote in September in response to the Centers for Medicare & Medicaid Services’ (CMS’) 984-page proposal. “Physicians and the patients in their care deserve a reliable Medicare physician payment system that keeps up with inflation and practice costs.” 

An unsustainable system  

TMA’s comment letter focused largely on the following CMS proposals:  

  • Cutting Medicare physician pay by 4.4%;  
  • Further adjusting the Merit-Based Incentive Payment System (MIPS);  
  • Rejiggering the Medicare Shared Savings Program (MSSP) to spur participation;  
  • Extending pandemic-era telehealth flexibilities;  
  • Allowing nonphysician health care professionals to provide behavioral health care without direct physician supervision; and  
  • Penalizing physicians who don’t e-prescribe controlled substances.  

The fee schedule proposal lowers the conversion factor that helps determine physician payments by 4.4% compared with the 2022 formula. If enacted, the cut would be one of many to take effect in 2023 – barring congressional intervention – including a sequester cut and other reductions mandated by law.  

In its letter, TMA calls on Medicare to work with the AMA RVS Update Committee (RUC) to appropriately value all services and implement payment policies that are fair for all physician specialties. That includes eliminating budget neutrality requirements that TMA says “creat[e] a system of ‘winners’ and ‘losers,’” because any pay increases and decreases must offset one another.  

Between 2001 and 2020, Medicare physician payments decreased 22% when adjusted for inflation, whereas Medicare payments for hospitals and other health care facilities generally have kept pace with inflation, according to AMA. Over the same period, the consumer price index for medical care in U.S. cities increased 95%, according to the U.S. Bureau of Labor Statistics.  

“Just like hospitals, physicians and their practices have increasing costs … that are increasing even more because of inflation,” Dr. Floyd said. “We believe the physicians deserve that yearly increase just like hospitals, just like health care plans, because we have the same issues.” 

When Texas physicians last went through the same rigmarole, nearly two-thirds of them reported in a 2021 TMA survey they might be forced to stop seeing new patients as a result of successive pay cuts. Additionally, 59% of respondents said they would consider opting out of Medicare entirely, 43% might consider retirement, and 42% may have to stop seeing their existing Medicare patients.  

Stop the MIPS madness 

As for Medicare’s value-based care programs, CMS claims its proposed changes to MIPS and MSSP minimize the administrative burdens that frustrate participating physicians and dissuade others from enrolling. 

But TMA vociferously disputed this characterization in its comments, writing: “The agency proposes countless updates and changes to [MIPS] such that the agency posted a ZIP file containing four documents totaling 72 pages that attempt to explain this myriad of complicated changes.” 

Instead, TMA pleaded with CMS to limit MIPS adjustments and prioritize voluntary, physician-led advanced alternative payment models rather than introducing new ones like the MIPS Value Pathways (MVPs). (See “What’s New in Value-Based Care,” July 2022 Texas Medicine, pages 12-18.) 

“Tweak MIPS requirements only as needed or when doing so significantly reduces the burdens physicians bear while navigating the MIPS program,” Dr. Floyd wrote. “CMS should maintain consistency in MIPS requirements if the agency earnestly hopes to encourage physician participation in this overly complicated program.”  

On the other hand, TMA welcomed some of the MSSP changes that could reduce barriers to participation, such as advance investment payments (AIPs), while urging CMS to make such options even more widely available to practices of various stripes. (See “Holding Their Own,” page 46.) 

Kim Harmon, TMA associate vice president of innovative practice models, says overall MSSP participation has declined in recent years as federal regulations have forced accountable care organizations (ACOs) to assume risk at a faster pace. Although more than 11 million patients are currently covered under MSSP, the number of patients assigned to the program continues to fall as Medicare Advantage enrollment outpaces traditional Medicare. 

As part of a slate of changes intended to boost ACO participation, CMS proposes making AIPs available to certain new ACOs, which could be used to purchase the technology and data management resources and to hire the care coordinators necessary to participate in the program. 

TMA welcomed this and other changes that could help CMS reach its goal of transitioning patients enrolled in traditional, fee-for-service Medicare to value-based care arrangements by 2030, including:  

  • Allowing smaller, inexperienced ACOs to remain in no-risk contracts for their initial agreement with Medicare, which would give them more time to transition to value-based care and to recruit physician members; 
  • Revising its method for calculating financial benchmark updates to ensure high-performing ACOs aren’t penalized for their success;  
  • Implementing a sliding scale for quality performance that ensures ACOs qualify for a portion of shared savings even if they don’t meet the threshold for maximum shared savings; and 
  • Simplifying ACOs’ administrative requirements.  

At the same time, TMA asked CMS to consider phasing in and even limiting recoupment of any advance funding in order to encourage long-term participation, and providing new opportunities to engage specialists in Medicare value-based programs. 

Among Medicare’s other proposals, TMA asked that CMS:  

  • Defer to state laws and rules that govern a health professional’s scope of practice/licensure, including any delegation and supervision requirements applicable under state laws; 
  • Permanently continue telehealth flexibilities and pay for telehealth services at parity with in-person service rates after the COVID-19 public health emergency and the 151-day extension concludes; 
  • Not unfairly favor health visits with telemedicine-only companies with imbalanced pricing incentives; and 
  • Postpone e-prescribing of controlled substances (EPCS) enforcement for the next two years without imposing penalties for noncompliance. 

CMS seeks to expand access to behavioral health care and telehealth, especially in rural and underserved areas, as part of its plan to address health inequities as well as long-standing issues related to mental health, the opioid epidemic, and cancer treatment.  

However, TMA strongly objected to CMS’ plan to permit licensed professional counselors, marriage and family therapists, and other behavioral health professionals to provide care under general, rather than direct, supervision, among other changes. CMS should defer to state laws and rules governing scope of practice for nonphysician health care professionals to minimize the risks of inconsistent quality of care and patient confusion, TMA urged in its comment letter. 

“We staunchly support a physician-led medical team to take care of patients,” Dr. Floyd told Texas Medicine. “Physician-led because they are the highest trained and have the most experience, and every patient deserves a physician with appropriate training … as opposed to a six- or nine-month clinical stint and a very different curriculum.” 

And considering how important telehealth has become not only to behavioral health but also to other types of care, TMA offered some strong recommendations to go along with its endorsement of Medicare’s plans to extend certain pandemic-era telehealth flexibilities – including removing site restrictions and covering audio-only visits – beyond the national COVID-19 public health emergency. (See “Mental Telehealth Paves the Way,” page 34.) 

Paying for telehealth visits at the same rate as in-person visits for the same service is critical to ensuring telehealth’s continued success, says Ogechika Alozie, MD, an infectious disease specialist in El Paso and chair of TMA’s Committee on Health Information Technology. 

“To truly change how we provide care, permanent payment parity as well as permanent removal of the geographic site restriction is a must,” he explained. “This will allow the most vulnerable patient populations, many who have comorbid conditions and mobility challenges, to be seen in their own homes.”  

Also a must for the continued success of EPCS is removing any monetary or other punitive penalties for noncompliant prescribers, which CMS proposes to implement starting in 2025.  

TMA supports the agency’s plan to delay program enforcement by two years. But citing the already high rate of compliance among prescribers – 74%, according to the 2021 National Progress Report published by Surescripts – TMA emphasized in its comments that noncompliant physicians either don’t prescribe controlled substances or can’t afford to adopt yet another unfunded mandate. Those in the latter camp likely work in small and rural primary care practices, which serve as “the bedrock of health care in many underserved communities,” TMA wrote. 

Instead, TMA urged CMS to incentivize such prescribers to adopt EPCS rather than penalize them, commenting: “Financial penalties impose unintended consequences, such as limited access to care or physicians not prescribing necessary medications to patients.” 

“We should be celebrating the fact that [more than] 70% of prescribers are now EPCS-enabled. That’s quite an achievement,” Dr. Alozie said. 

TMA continues to monitor 2023 Medicare physician fee schedule development. Once CMS has released its final 2023 fee schedule, TMA will help prepare Texas physicians for the impending changes.

Last Updated On

November 01, 2022

Originally Published On

October 26, 2022

Emma Freer


(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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