HHS Secretary Xavier Becerra indicated he hopes to work with Congress on changes to the Medicare physician fee schedule, coming as providers tell lawmakers the agency’s planned pay freeze for fee-for-service Medicare can’t be reconciled with the projected almost 8% pay raise for Medicare Advantage.

Becerra also said at a meeting with reporters on Thursday (March 17) that HHS will step up its oversight of Medicare Advantage and suggest to Congress any reforms that would increase the Medicare program’s value to beneficiaries. He acknowledged concerns about overpayments in MA and potential upcoding, and said HHS is looking closely at some aspects of the MA pay system.

“We are looking closer into some aspects of the payment system in Medicare Advantage, and we want to make sure that, again, whether it’s fee for service or Medicare Advantage, that seniors are getting value for their previous contributions and taxes,” Becerra said.

Providers and some lawmakers have pushed for months to get Congress to look at long-term Medicare pay reforms. Some GOP lawmakers pushed for reforms and hearings during House discussion of Democrats’ now-defunct Build Back Better package last fall, while others pushed for an in-depth look at the system prior to the passage of stop-gap fixes to Medicare pay in December.

As it stands, Medicare sequester cuts are set to begin phasing in on April 1 with a 1% cut that grows to 2% come July. Further sequester cuts are set to go into effect late this year or early next year as a result of the cost of the American Rescue Plan, according to the Committee for a Responsible Federal Budget, after lawmakers moved the cost of that law to the 2023 PAY-GO scorecard last December.

Providers are lobbying hard to stop the pay cuts. Some providers also are pressing lawmakers to stop the phase-in of cuts tied to CMS changes to clinical labor policy in the physician fee schedule, while others are worried about the end of the alternative payment model bonuses coming next year.

The Medicare Payment Advisory Commission’s recent recommendation backing a pay freeze for physicians under the fee schedule has also caused consternation among providers, with the American Medical Association saying such a move would hurt patient access.

“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,” AMA says in a March 15 letter to House and Senate leadership. “Freezing physician payment is also impossible to reconcile when viewed against the nearly eight percent payment increase the Centers for Medicare & Medicaid Services projects for Medicare Advantage plans in 2023.”

AMA alleges that providers under the physician fee schedule lack an annual pay update on par with other providers in Medicare and per-enrollee spending under the fee schedule has fallen, even as other providers are seeing an increase in Medicare pay. AMA says the group is grateful that Congress acted to avert a nearly 10% cut to physician pay in 2022, but Congress needs to do more.

“[I]t is urgent that Congress work with the physician community to develop solutions to the systematic problems with the Medicare physician payment system and preserve patient access to care. 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,” AMA says.

A coalition of organizations representing more than a million providers also told key committee leaders late last month that the physician fee schedule’s budget-neutrality requirements and the lack of an annual inflationary update will continue to generate significant instability for providers. They raised problems with the Merit-based Incentive Payment System, as well. The incentive payments in MIPS have been far below what Congress envisioned when the Medicare Access and CHIP Reauthorization Act was passed, and those low incentives combined with what the group calls instability in the physician fee schedule have caused some providers to see pay decline even as costs increase, the coalition says in a Feb. 25 letter.

Becerra on Thursday was asked about providers’ push for reform of the physician fee schedule and whether HHS is interested in talking about that with Congress.

“I’m definitely interested because I remember those cliffs from when I was in Congress. We always have to deal with those,” Becerra said, referring to the Congress’ repeated patches to the Sustainable Growth Rate formula, which was replaced by MACRA.

“And now that we’ve seen what happens when you got COVID, and how important the health profession is, you never want folks thinking there may be a different profession for them down the line because they’re just not making it where they are,” he added.

One lobbyist said it is possible that lawmakers could hold hearings on Medicare pay issues later this year, but another predicted Medicare physician pay reforms are unlikely to be a high priority.

A spokesperson for the House Energy & Commerce Committee said the committee is “always interested in ways to improve beneficiary access to quality care in Medicare,” but did not provide additional details. The House Ways & Means chair and ranking Republican at press time had not responded to questions on whether they plan to consider Medicare pay reforms, and the Senate Finance Committee had not responded to similar questions. -- Michelle M. Stein (mstein@iwpnews.com)