Doctor pay to drop in 2027 under proposed Medicare pay rule
Physicians billing Medicare would see a pay dip next year as part of a sweeping reimbursement rule that also aims to increase provider participation in accountable care organizations and overhaul quality reporting.
Under the proposed regulation released Tuesday, the conversion factor used to calculate payment rates would drop by 1.68% for doctors who don’t participate in alternative payment models and by 1.19% for doctors who do.
The update includes a small bump for both groups of physicians to account for changes to how CMS measures the value of their work, offset by a 2.5% drop in Medicare pay because a temporary reimbursement increase Congress approved last summer will expire in 2027.
Provider groups slammed the proposal, arguing that the payment cut would destabilize physician practices and limit investment in primary care.
The updates “fall well short of what it actually costs our members to deliver care,” said Dr. Jerry Penso, president and CEO of the American Medical Group Association.
Annual updates are required by law to be budget neutral, meaning Medicare physician pay has fallen behind the rising cost of delivering care, according to research. Though Congress normally steps in to pass an increase before cuts go into effect, Medicare billing is overdue for a complete overhaul to ensure America’s physician practices can remain in business, doctors argue.
“The proposed rule once again cries out for Congressional action to halt these devastating fee cuts at a time when so many physician practices are operating close to the brink,” Susan Dentzer, president and CEO of America’s Physician Groups, said in a statement.
The rule also includes other pay changes that the CMS said would help shift the health system from treatment to prevention and preserve the insurance program’s long-term sustainability.
For example, the agency is proposing to reduce pay when an evaluation and management visit is provided on the same day as a bundled surgical service at the same physician practice, in order to prevent duplicate reimbursement, the CMS said. The rule would also tighten regulations around billing for some remote monitoring services.
Boosting ACO participation
The CMS is looking to make significant changes to the Medicare Shared Savings Program, the nation’s largest ACO program, in a bid to convince more providers to participate in the value-based care arrangements.
Under MSSP, ACOs, or groups of doctors and other providers who work together to coordinate care for Medicare beneficiaries, receive a portion of the savings they generate compared to a benchmark. If ACOs’ spending exceeds the benchmark, they may have to pay a penalty.
ACOs can choose to participate in two tracks under MSSP: a basic track, which includes multiple levels of increasing financial risk, and an enhanced track, which offers the highest level of risk and reward.
The proposed rule would make several changes to MSSP. One change would increase the shared savings rate on the highest level of the basic tier, Level E, from 50% to 60%. Evidence suggests ACOs in the Level E of the basic track generate higher savings to Medicare than the enhanced track, with fewer participating organizations, the CMS said.
“By reducing the savings percentage gap between BASIC track Level E and the ENHANCED track, we may increase the participation and long-term success of ACOs, particularly those with less experience with the Shared Savings Program, with unique patient and/or provider populations, and low revenue ACOs,” the CMS said in a fact sheet on the rule.
The proposal would also allow ACOs to add more of their previously achieved savings back into their financial benchmarks when renewing contracts, establish a growth adjustment to the benchmark to reward ACOs for recruiting providers and patients new to value-based care, and let ACOs reduce or eliminate Medicare outpatient cost sharing for certain beneficiaries or services.
MIPS revamp
The CMS is also planning to sunset the Merit-based Incentive Payment System, a Medicare program launched nearly a decade ago that ties reimbursement to improved quality and cost.
The goal of MIPS was to shift Medicare away from fee-for-service reimbursement to value-based care, but clinicians have long complained about the program’s complexity and hefty reporting burden.
Under the new proposal, the CMS would transition clinicians into MIPS Value Pathways, or MVPs, in 2029. MVPs are focused on a specific specialty or medical condition, and should provide a more streamlined and connected assessment of care quality, the agency said.
Each MVP will also have a limited list of measures and activities, which should reduce administrative work, according to the CMS.
The agency is also proposing to create new MVPs focused on diabetes, hypertension and hospital care, in a bid to expand opportunities to participate and promote disease prevention.
Finally, the rule would begin MIPS Core Measures next year, where every clinician would report at least one measure important to their specialty or patient population, to improve consistency and generate more meaningful quality data, the CMS said.
Though provider groups slammed the rule’s payment proposals, they generally supported the changes to value-based care reporting.
MVPs are a better option because “they group together smaller, more clinically relevant measures instead of the hundreds of disconnected measures in traditional MIPS,” APG said, arguing the rule is a “double-edged sword.”
