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WASHINGTON -- Medicare payments to physicians don't need to be increased next year, the Medicare Payment Assessment Commission (MedPAC) said Tuesday in a .

"Overall, access to clinician services for Medicare beneficiaries appears stable and comparable to that for privately insured individuals," the commissioners said in their 604-page report, one of two reports the commission is required to send Congress each year. Although the pandemic makes it difficult to assess beneficiaries' quality of care, "we expect volume and revenue to return to pre-pandemic levels (or higher) by 2023. Therefore, the commission does not see a reason to diverge from the current-law policy of no update for 2023."

Some Concerns About Primary Care

At a press conference Tuesday, MedPage Today asked MedPAC executive director James Mathews, PhD, about whether the commission had considered the cumulative effect of several years without any payment increases for physicians. Mathews said that was "a very good question" and added that "some of our commissioners expressed concerns along these lines ... But our charge is to look at the data that we have and to inform our recommendations on the adequacy of Medicare payments."

Looking at Medicare beneficiaries' use of services in 2020, "Medicare paid for almost [750 million] in Part B covered services under the Physician Fee Schedule, so beneficiaries seem to be getting access to care," he said. "We look at rates of [physician] participation in the Medicare program and rates of opting out. The rate of participation continues to be high, and the rate of non-participation or opt-out is very low and is concentrated in a very small number of specialties for the most part."

Of the physicians that participate in Medicare, "the vast, vast majority take Medicare payments in full on assignment," Mathews continued. "So those indicators, imperfect as they may be, do suggest that in the aggregate, Medicare payments to physicians and other clinicians are sufficient to ensure access." However, he added, "underneath those aggregates, there are causes for concern. Commissioners have been concerned about beneficiary access to primary care for the last decade," in part because of the disparity in compensation between primary care physicians and other specialties. MedPAC has therefore developed recommendations to address the supply of primary care physicians, Mathews said.

"Lastly, I would say we are always on the lookout for any additional leading indicators that we should be looking at to help illuminate whether or not there are impending access problems just over the horizon," he concluded. "At this point in time we do not have any reliable enough [leading indicators] for us to use to forecast future access to care problems, but it is something that we would be welcome to entertain should any of your readers have ideas for us to consider."

"Deeply Troubling" Recommendation

The Medical Group Management Association (MGMA), which represents physician practices, panned MedPAC's recommendation calling it "deeply troubling" in the context of the U.S. experiencing its highest annual inflation rate in 40 years. "With reinstatement of the 2% Medicare sequester penalty scheduled to begin phasing-in in a few short weeks, physician practices are already set to face serious financial impacts -- at a time when they are still reeling from pandemic related disruptions, rampant staffing shortages and skyrocketing expenses -- making MedPAC's decision even more out of touch with the reality physician practices face every day," Anders Gilberg, MGMA's senior vice president for government affairs, said in a statement. (Disclosure: Gilberg is a member of MedPage Today's editorial board.)

"As MGMA has continued to warn, without a modest annual payment update to keep up with the cost of inflation, physician practices will inevitably be forced to make difficult decisions about their Medicare participation -- decisions that would certainly result in diminished access to the critical healthcare services on which beneficiaries rely," he said. "To ensure the financial stability of physician practices and protect beneficiaries' access to care, MGMA urges Congress to make critical updates to physician payment, including the permanent repeal of the 2% Medicare sequester, an update to Medicare payments in 2023 that reflects actual inflation, and an extension of the 5% incentive payment for participants in alternative payment models."

The American Medical Association (AMA) also was unhappy. "This recommendation would imperil patient access to high-quality care as the costs to practice medicine continue to rise," AMA's executive vice president and CEO, James Madara, MD, said in a . "Physicians have been enduring an increasing financial instability of the Medicare physician payment system due to a confluence of fiscal uncertainties related to the COVID-19 pandemic, statutory payment cuts, consistent lack of inflationary updates, and significant administrative barriers. Freezing physician payment is also impossible to reconcile when viewed against the nearly 8% payment increase the Centers for Medicare & Medicaid Services projects for Medicare Advantage plans in 2023."

"At a minimum, Congress must establish a stable, annual Medicare physician payment update that keeps pace with inflation and practice costs and allows for innovation to ensure Medicare patients continue to have access to physician practice-based care," Madara concluded.

Payment Cuts for Nursing Homes, Home Health

Other highlights of the MedPAC report included:

• No payment increases for ambulatory surgery centers or hospices. "The ambulatory surgical center zero update is consistent with our prior recommendations in the sector, coupled with a recommendation that ambulatory surgical centers be required to report information on their costs to the Medicare program," Mathews said. "With respect to hospices, the zero update recommendation is coupled with a recommendation to revise the applicable aggregate hospice cap on payments, which would result in a roughly 3% reduction in aggregate payments to hospices, but this reduction would be targeted at hospices with the longest length of stay, which [have] historically been the most profitable [hospices] under the Medicare program."
• Payment cuts of 5% for skilled nursing facilities, home health agencies, and inpatient rehabilitation facilities. Those three facility types "have had historically extremely robust financial performance under the Medicare program and have continued to do so even in 2020, where even absent provision of relief funds, home health agencies and skilled nursing facilities actually experienced increases in their financial performance relative to 2019," said Mathews.
• Payment increases for hospitals, long-term care hospitals, and outpatient dialysis facilities. "These sectors would be projected to get a payment update for 2023 in the vicinity of 2% for hospitals and long-term care hospitals, and in the ballpark of 1% for dialysis facilities," said Mathews. According to the MedPAC report, although payment rates for acute care hospitals haven't yet been set, current government estimates "would result in the Inpatient Prospective Payment System (IPPS) base payment rate increasing by 2.5% and the Outpatient Prospective Payment System (OPPS) base payment rate increasing by 2.0%." The commission agreed with those increases, noting that "Our payment adequacy indicators in 2020 were mixed but generally positive. Fee-for-service Medicare beneficiaries continued to have good access to inpatient and outpatient acute hospital care ... The commission anticipates that a current-law update to hospital payment rates in 2023 would be enough to maintain beneficiaries' access to hospital inpatient and outpatient care and keep IPPS and OPPS payment rates close to the cost of delivering high-quality care efficiently."

The commission also included a status report on the Medicare Part D drug benefit plan, in which three-fourths of Medicare beneficiaries are enrolled -- a percentage that has been "relatively consistent" over the past few years. The average beneficiary has anywhere from 19 to 27 standalone Part D plans to choose from, as well as a variety of Medicare Advantage plans that offer a prescription drug benefit," said Mathews. "Spending continues to grow at a fairly robust clip, with program spending in 2020 being just over $100 billion, and an additional $18 billion paid by Medicare beneficiaries in the form of cost-sharing."

Part D has increased Medicare beneficiaries' access to prescription drugs, he added. "Generic drugs account for 90% of prescriptions filled under Part D, and premiums have remained relatively steady in the last half decade or so," at around $30 per month.

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