MedPAC recommends raises for physicians and hospitals that receive Medicare reimbursement

AMA, hospital group says payments don’t keep up with costs of doing business.

the Medicare Payments Advisory Committee (MedPAC) has recommended to Congress that physician and hospital payments be increased in 2024.

However, the American Medical Association (AMA) and American Hospital Association The AHA said the payments do not keep pace with the costs of doing business.

In late 2022, the Medicare physician fee schedule prompted several calls for greater reimbursement rates for physicians who treat Medicare beneficiaries. I stayed sticking point For doctors even as healthcare organizations He praised some judgments in the $1.7 trillion federal budget approved by Congress late last year.

MedPAC, a nonpartisan agency that advises Congress on Medicare policy, met Jan. 12 and 13, with presentations on payments to doctors and other health professionals, hospitals and more.

doctor payments

Physicians will receive pay increases linked to 50% of the Medicare Economic Index (MEI). The AMA has stated that the association supports this connection, but that “50% of the MEI just doesn’t go far enough.”

AMA President, MD, Jack Resnick said New release. When adjusted for inflation, it is the payment made by a Medicare doctor dropped 22% from 2001 to 2021.”

Meanwhile, doctors have struggled to keep practices open while dealing with rampant inflation, COVID-19, and soaring costs, but Medicare payments haven’t responded adequately, recently culminating in a 2% payment cut in 2023, according to the AMA.

“Increasingly weak operating margins disproportionately affect small, independent, and rural physician practices, as well as those that treat low-income or other historically marginalized patient communities,” Resnick said. access to future generations. The AMA and others are asking Congress to reform Medicare to make it more rational and to better serve patients. And as part of this, Congress must pass the Medicare Payments Update for 2024 that recognizes full inflationary growth in health care costs. “

Hospitals react

The American Heart Association thanks MedPAC for recommending a 2024 reimbursement update for the market basket plus 1% for future inpatient and outpatient payment systems (PPS). But the AHA called for an increased market basket plus 2.8% for inpatient and outpatient PPS hospitals and 2.7% for long-term care hospitals facing “unprecedented financial pressures due to inflation and nearly two decades of negative Medicare margins.”

“Simply put, Medicare payments to hospitals are not enough,” said A.J January 3 letter to MedPAC from Ashley B. Thompson, AHA Vice President for Public Policy Analysis and Development.

The American Heart Association explained how “Medicare payments have remained well below the cost of providing care for many years—a fact recognized by the committee.” Thompson said the MedPAC data book shows Medicare has not covered the costs of serving Medicare patients since 2002.

The American Heart Association urged the committee to update the rules for inpatient rehabilitation facilities and skilled nursing facilities in hospitals.

Medicare volume

MedPAC’s offerings included data on Medicare volume for 2021.

Medicare payments cover about 8,000 types of medical services and 1.3 million physicians billed on the Medicare physician fee schedule in 2021. Medicare paid $92.8 billion for services in 2021, $84.7 billion in 2020, and $97.2 billion in 2019.

MedPAC information indicated that the overall number of physicians is stable, but primary care providers are declining. Physician encounters per beneficiary declined in 2020, but “partially rebounded” in 2021, and average physician compensation grew at a rate of 3% annually from 2017 to 2021.

Hospital payments included 3,170 hospitals with 7.1 million inpatients and receiving $107.9 billion in fee-for-service payments. There were 3,370 outpatient hospitals that received $49.9 billion for 135.7 million services.

More is coming

MedPAC generally issues its recommendations in reports to Congress each March and June. MedPAC’s next general meeting is scheduled for March 2-3. Meetings are available online.

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