Senator Jim Perry: Update and improve the Medicare physician payment system
By Senator Jim Perry
The healthcare industry in American and North Carolina has experience considerable tumult over the past 2 years. Not every generation of doctors, nurses, and other providers is forced to confront a global pandemic. I know from speaking to my friends in healthcare that burnout is a serious threat to the availability of quality care in North Carolina.
The way Medicare pays participating physicians doesn’t help matters. Whereas providers across the continuum of care – from skilled nurses to in- and outpatient facilities – are seeing payment adjustments that reflect the higher costs of providing care, Medicare physicians are receiving zero.
Zero.
Physicians are not scheduled for a payment adjustment under Medicare until 2026. And even then, they will receive a paltry 0.25% annual increase, well below current inflation rates.
When you adjust for inflation, physicians have experienced dramatic cuts over the past 2 decades. A report from the Surgical Care Coalition estimates Medicare’s payments to physicians fell by 50% over that time period while the cost of running a practice rose by 39%. Even the most skilled business manager can't avoid all cost increases.
The risk of professional burnout rises exponentially when physicians cannot receive sufficient compensation for the work they do. It is not reasonable to expect anyone to provide care while enduring financial losses. It is not sustainable business model and patients will suffer.
The situation gets even more alarming. Due to a confluence of budget maneuvers and triggers in Washington, physicians face imminent Medicare payment cuts of 8.42%. Unless Congress acts immediately, North Carolina patients with Medicare could lose access to a physician.
The Centers for Medicare and Medicaid Services (CMS) has proposed a 4.42% cut for all physician payments in 2023. In addition, Congressional Pay-As-You-Go (PAYGO) triggers, intended to ensure budget discipline, kicks in next year and will implement a 4% across-the-board cut of all federal spending.
PAYGO is a fine mechanism in principle. But it will punish physicians who treat Medicare patients. None of the recent growth in federal spending that triggered PAYGO is the result of Medicare payments to physicians, yet those same physicians will be forced to absorb PAYGO’s cuts. Who believes physicians have experienced cost decreases during this time? Their costs have gone up.
Congress typically addresses these challenges with temporary “fixes” that shuffle draconian cuts off into the future. The time for short-term fixes is over. Congress should reform Medicare’s physician payment model altogether before the “silver tsunami” of aging baby boomers overwhelms our healthcare system.
First, and this is urgent, Congress must pass new legislation that prevents CMS’s 4.42% cut from taking effect. We cannot allow the calendar to turn to 2023 with such a drastic cut hanging over our doctors.
Then, Congress has to change the way Medicare adjusts physician payments. Annual adjustments should consider inflation and the true costs of running a practice. Finally, Congress needs to waive statutory PAYGO spending reductions for physicians, who have not received increases in payments and therefore have not contributed to the explosive growth of federal spending that triggered PAYGO in the first place. Healthcare for our elderly is an obligation, not a negotiation.
As a practicing physician, our own Rep. Greg Murphy (R-NC)would be the ideal elected leader in Washington to head up such a reform effort.
It is disingenuous to talk about healthcare access while asking physicians to treat patients while incurring financial losses. The nearly 2 million North Carolinians with Medicare deserve access to quality providers, especially physicians. It’s time for Congress to update and improve the Medicare physician payment system.
