Medical Group Associations Criticize MedPAC for Its Recommendation Against MD Payment Update

March 16, 2021
The leaders of MGMA and AMGA, the nation’s two largest national medical group associations, are criticizing MedPAC for its recommendation that physicians not receive a payment boost in 2022

Over the past several days, the leaders of the two largest national associations of medical groups in the U.S. criticized what they see as upcoming cuts to physician reimbursement under Medicare that could prove very harmful to practicing physicians. In separate statements on March 10 and March 15, the leaders of the Alexandria, Virginia-based AMGA (American Medical Group Association) and the Englewood, Colorado-based MGMA (Medical Group Management Association) posted statements on their websites expressing their concerns.

On March 15, MGMA’s leaders spoke out against the recommendations contained in its latest report to Congress by MedPAC, the Medicare Payment Advisory Commission, on physician reimbursement. MedPAC, a nonpartisan legislative branch agency, annually advises Congress on Medicare-related payment issues, issuing reports analyzing the payment landscape. While recognizing that “Providers are also under stress,” the report notes that “The longer-term prospects for the [Medicare] program are daunting,” and indeed, that “The financial future of the Medicare program was already problematic, but as a result of job losses, in 2020 the Congressional Budget Office projected that Medicare’s Hospital Insurance Trust Fund will become insolvent by 2024—two years earlier than previously expected. Driven by growth in the volume and intensity of services provided to beneficiaries and the number of beneficiaries aging into the program, Medicare’s annual spending is projected to double in the 10-year period between 2019 and 2029, from $782 billion to $1.5 trillion. During this period, Medicare’s share of total federal spending is expected to rise from 14.6 percent to 17.5 percent.” It is in that context that MedPAC states on age 369 of its report that “The Commission has concluded that aggregate payments are more than sufficient to cover providers’ costs and that the payment rates in 2022 should be held at their 2021 levels. In addition,” the report states, “the Commission has concluded that aggregate payments should be reduced by wage adjusting and reducing the hospice cap, an approach that focuses payment reductions on providers with the longest stay and high margins.”

MedPAC on March 15 issued a summary of the report in the form of a press release, as well as the full report itself. In the summary, the Commission stated that, “Overall, these recommendations would reduce Medicare spending while preserving beneficiaries’ access to high-quality care. For acute care hospitals, we recommend payment updates of 2 percent for both inpatient and outpatient services and note that this update should be accompanied by our 2019 recommendation to revise Medicare’s hospital quality incentives programs. MedPAC recommends that payments be updated by the amount specified in current law (no update) for physicians and other health professionals. We also recommend no payment increase for 2022 (lower than current law) for four FFS payment systems: ambulatory surgical centers, outpatient dialysis facilities, skilled nursing facilities, and hospice services.”

The leaders of MGMA see the situation very differently. Their statement, attributed to Anders Gilberg, MGMA’s senior vice president, government affairs, began thus: “MGMA is deeply troubled by MedPAC’s recommendation that Congress provide no payment update for physician services in 2022. Physician practices are subject to annual increases in staff salaries, rent, and supplies. Without a modest annual payment update to keep up with the cost of inflation, practices will ultimately be forced to make difficult decisions about Medicare participation. MedPAC also states it does not anticipate any long-term effects related to the public health emergency (PHE) that would warrant changing the annual update to Medicare’s fee schedule for 2022. At this point, it is too early to assume that medical practices will not continue to experience financial challenges stemming from the COVID-19 pandemic next year or an acceleration in post-pandemic practice-cost inflation. Without congressional intervention, group practices will also face payment cuts in 2022 attributed to sequestration and a likely lower physician fee schedule conversion factor due to evaluation and management service revaluations.”

The statement continued, “MGMA is pleased to see that MedPAC recognizes the importance of being able to provide telehealth services to beneficiaries regardless of their location and conduct audio-only visits when clinically beneficial. However, we would like to see these changes implemented on a permanent basis. MGMA disagrees with MedPAC’s belief that following the conclusion of the PHE, Medicare should return to paying the lower facility rate for telehealth services.”

The leaders of the Alexandria, Va.-based AMGA (American Medical Group Association) expressed similar misgivings; after praising the Biden administration for the American Rescue Plan, they sounded the alarm about physician reimbursement cuts.

The statement posted on AMGA’s website on March 10 began thus: “AMGA appreciates the investments Congress made today in vaccine distribution, COVID-19 testing and surveillance, and efforts to expand affordable health insurance coverage. Passage of the American Rescue Plan acknowledges the continued threat COVID-19 poses to our nation’s health and economy. The additional federal support will provided needed assistance to state and local public health authorities, healthcare providers, and individuals and families harmed by this pandemic.”

“It’s been a long year for everyone—patients, providers, families, students, the whole country,” said AMGA President and CEO Jerry Penso, M.D., M.B.A., said in a statement. “The investments in this legislation will help the ongoing fight against COVID-19 as well as our economic recovery.”

And, the association’s statement continued, “Enactment of the American Rescue Plan, however, would trigger automatic spending cuts as a deficit control measure and mandate $36 billion in Medicare cuts in fiscal year 2022. Congress needs to act quickly to cancel these statutorily mandated spending cuts to ensure they do not undermine the investments and progress made in fighting COVID-19.”

“Cutting billions from the Medicare program now would undermine healthcare providers who have heroically rallied all year to care for their patients and communities,” Penso said. “Now is not the time for Congress to forget the sacrifices our providers have made during the pandemic.  We call on Congress to quickly remedy this problem and support the provider community.”

Meanwhile, on March 16, MGMA released a statement applauding the introduction of a bipartisan bill to extend the sequester cuts moratorium, introduced by Senators Susan Collins (R-Maine) and Jeanne Shaheen (R-New Hampshire). Attributed to MGMA’s Gilberg, the statement read, “MGMA supports recent bipartisan, bicameral efforts to extend the 2-percent Medicare sequester moratorium for the duration of the COVID-19 public health emergency. We applaud Senators Shaheen and Collins for introducing the Medicare Sequester Relief Act and Representatives Schneider and McKinley for introducing the Medicare Sequester COVID Moratorium Act. MGMA also supports and urges Congress to pass H.R. 1868, which would prevent the projected 4% Medicare spending cut stemming from the American Rescue Plan in addition to extending the 2% Medicare sequester moratorium. Without congressional action, the country’s medical groups will face a combined 6-percent sequester cut---a payment cut that is unsustainable given the financial hardships due to COVID-19 and keeping up with the cost of inflation.”

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