Senate Finance Committee Kick Starts Physician Payment Reform Discussion


May 1, 2024

As a member of the Primary Care Collaborative, the ACOI joined a statement in response to an April 11 hearing held by the Senate Finance Committee, “Bolstering Chronic Care through Medicare Physician Payment.”  

The hearing launched discussion over the broken Medicare physician payment system, with Finance Committee Chairman Ron Wyden (D-OR) centering his remarks on the need for traditional Medicare fee for service (FFS) to evolve to manage those with chronic conditions and highlighting the flexibility of Medicare Advantage (MA) plans to adopt innovative approaches to chronic disease management. Sen. Wyden also called some MA plan prior authorization practices “outrageous” and said the “financial vultures” need to be stopped when referring to the roughly $6 billion that MA plans spend on marketing to seniors when that money could be going to patient care.  

Committee Ranking Member Mike Crapo (R-ID) said the current Medicare payment paradigm has led to a decline in physician payments of more than 25% over the past two decades, as physicians experience skyrocketing overhead costs. Senator Crapo highlighted the unfairness of budget neutrality requirements and noted that payment instability has led to physicians selling their practices or accepting fewer Medicare patients. He also criticized the Merit-based Incentive Payment System (MIPS) saying it has “buried physicians in paperwork for potential marginal payment bumps based on ambiguous metrics that lack meaning to patients.” Sen. Crapo also called the failure of the Centers for Medicare and Medicaid Services to address prior authorization for pharmacologic therapies in recent rulemaking “problematic.”

Committee members spoke about a range of issues during the hearing, including telehealth, alternative payment modes, food as medicine, and access to care in rural areas. Notably, Sen. Elizabeth Warren (D-MA) remarked during the hearing there needs to be a better understanding of what is motivating physicians to sell their practices to private equity, and called the American Medical Association’s Relative Update Committee (RUC) process “secretive” and one that has favored specialty care.  

The hearing represents an important start to deliberations over how to fix the broken Medicare physician payment system. Because long-term solutions may not come to fruition this year, ACOI and the physician community will also be calling on Congress to intervene to prevent anticipated cuts to physician payment in 2025.  

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