Sep 18, 2023 - Health

Fight over Medicare pay hinges on primary care

Illustration of a hundred-dollar bill in the shape of a manila folder.

Illustration: Brendan Lynch/Axios

A Medicare effort to boost payments to primary care doctors and better coordinate care for patients with complex medical needs has set off a lobbying frenzy to forestall steep cuts specialists would face as a result.

Why it matters: The fight over physician payments underscores how Medicare's strict budgeting rules can create unintended consequences, like pitting medical specialties against each other.

  • Medicare physician payment is based on a set pot of money — meaning annual payment increases in one area set off decreases in another.

Flashback: In 2020, the Centers for Medicare and Medicaid Services created a new Medicare billing code, known as G2211, that would better reimburse physicians for complex patient office visits.

  • CMS estimated the code would be used on a whopping 90% of claims.
  • Officials predicted it would mostly be used by primary care providers and doctors who care for people with chronic conditions — so surgeons and other specialists would see reduced payments.
  • Congress quickly stepped in amid concern from specialist groups and delayed the code's implementation until Jan. 1, 2024.

Where it stands: CMS over the summer proposed a 3.36% cut to a key metric governing 2024 physician pay, known as the conversion factor.

  • Much of the cut comes from the new billing code for complex office visits.
  • CMS proposed changes to when the code could be used, and it now expects it will be used in 38% of office visits next year.
  • Even though that is far below the 2020 estimate, specialists would still see a big hit to reimbursement rates.
  • Public comment on the payment proposal closed last week.

Physicians are lobbying Congress to change their payment system so increases to one specialty's payment don't have to mean decreases to another's. Lawmakers have had early discussions about it, but doctors don't expect to see big changes this year.

  • In the meantime, physician groups say, CMS can mitigate the payment cuts scheduled for next year by again revisiting how often it thinks doctors will use the new billing code in its first year.
  • CMS hasn't given doctors enough guidance about the code, which decrease the likelihood that it gets used, the American Medical Association wrote to officials.
  • Primary care providers, who strongly support the new code, also believe CMS is overestimating its use. Data on similar billing codes shows uptake has been lower than anticipated, the American College of Physicians wrote in May.
  • One similar code was found on 9.3% of claims, even though 22% of Medicare enrollees were eligible, ACP said.

What they're saying: "While we would love most of our members to be getting the benefit of this code, the reality is, when new codes are introduced, utilization is usually pretty low," said Stephanie Quinn, a senior vice president overseeing government relations at the American Academy of Family Physicians.

  • New codes require practices to modify their workflows, and providers may be concerned about Medicare audits, AAFP told officials.
  • "Getting that [estimate] right, I think, is important, because we don't want it to have an outsized impact on the overall payment," Quinn said.

Yes, but: Because Medicare payment to physicians is based on a set budget of money each year, officials will need to find extra money from outside that set pool to pay for any unanticipated use of the billing code.

  • That could potentially lead to higher premiums for Medicare beneficiaries in future years, noted Martin Corry, government relations and public policy chair at Hooper Lundy Bookman.
  • On the other hand, if CMS overestimates how much the code is used, that money goes back into the Medicare trust fund rather than towards physician payments.

CMS doesn't change policy on a whim, so the agency would need to believe there's a convincing case for changing the estimate when it finalizes 2024 physician pay.

  • "As a general rule of thumb, once CMS puts something out there in the proposed rule, the chances are pretty high that they're going to keep it in the final rule," said Rob Wanerman, a health care lawyer at Epstein Becker Green.

Of note: Some specialty groups still maintain that the code shouldn't be implemented at all.

  • "There is no longer a valid justification" for the complexity code after Medicare raised reimbursement for other primary care codes, 19 surgery trade groups wrote to CMS in July.

Editor's note: The story has been updated to correct the name of the American Academy of Family Physicians.

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