Physician Payment Reform
The Society for Vascular Surgery actively engages federal lawmakers and the administration to propose and advocate for a Medicare payment system that incentivizes high-value care for seniors, appropriately compensates surgeons for their time and skill, and minimizes administrative burdens on physicians and their practices.
For more than twenty years, Medicare payments have been under pressure from the Centers for Medicare & Medicaid Services (CMS) anti-inflationary payment policies. While physician services represent a very modest portion of the overall growth in spending, they are perennial targets for cuts when policymakers seek to tackle spending. Although Congress repeatedly intervened to prevent reimbursement cuts to surgeons, anesthesiologists, and other physicians due to the sustainable growth rate (SGR) system — which was enacted in 1997 and repealed in 2015 — Medicare physician payments have remained constrained by a budget-neutral financing system, and updates to the conversion factor (CF) have failed to keep up with inflation. The result is that the CF today is only about 50% of what it would have been if it had simply been indexed to general inflation starting in 1998.
Additional pressures, such as sequestration (across the board spending cuts) required by pay-as-you-go (PAYGO) rules — which require tax cuts and mandatory spending increases to be offset by tax increases or cuts in mandatory spending — lead to additional reductions to Medicare payments. Coupled with sequestration, additional CMS policies — such as the creation of the G-2211 add-on code (slated for implementation in 2024), the failure to update the postoperative evaluation and management (E/M) values of the global surgical codes, and the clinical labor update policy — will place significant downward pressure on payments in coming years if these policies are not averted.
The SVS, and others across the medical specialty community, continue to urge Congress to:
- Prevent all forthcoming cuts to Medicare physician payments;
- Provide for a modest increase in Medicare physician payments to account for the increasing costs that physicians are facing in their practices; and
- Work with the physician community to establish a revised payment system compatible with the current health care environment.
General Coalition Efforts
The SVS has established itself as a payment reform leader within the medical specialty community. Over the last year, the SVS has:
- Convened a SVS Payment Reform Summit to identify and analyze potential policy solutions relating to physician payment reform;
- Drafted letters and talking points for use across the physician community;
- Scheduled and led meetings with critical lawmakers; and
- Coordinated the sharing of content between groups to ensure cohesion within the physician community
End of the Year (2022) letter addressing the Conversion Factor
Official 2021 Letter from the SVS to CMS on the 2022 Proposed Cuts
SVS Town Hall: CMS Cuts (November 2021)
Clinical Labor Coalition
For the last several years, Congress has taken action to mitigate pending across the board payment cuts resulting from reductions to the Medicare conversion factor (CF). In addition to these critical efforts, there is a separate stream of ongoing clinical labor cuts to office-based specialists which will result in some services being subject to additional cuts through 2025. This is due to a 2022 Medicare Physician Fee Schedule (PFS) policy which updated 20-year-old clinical labor wage data calculated as part of the direct practice expense relative value units in the PFS. Unfortunately, the required application of budget neutrality within the direct practice expense has resulted in office-based specialists seeing their reimbursement for certain codes decreased by well over double digit amounts through 2025, separate and apart from any conversion factor cuts.
Office-based specialty care is a critical service outside of the hospital setting. These specialists provide a wide range of services to patients with cancer, end-stage renal disease, fibroids, as well as limb salvage and venous ulcer needs. The office setting also is critical to patient access (especially in rural and underserved areas), pandemic resilience (so hospitals can focus on COVID patients), and lower Medicare copays.
To avoid significant disruptions in patient access, the SVS established the Clinical Labor Coalition to spearhead collaboration in securing relief from these targeted payment reductions.
The SVS anticipates introduction of legislation in the 118th Congress to:
- Target “Specified Non-Facility Services,” (i.e. office-based services) where at least 65% of “direct costs” of “practice expense revenue value units” are comprised of equipment and supplies (these services are the ones most hurt by the clinical labor cuts);
- Increase office-based PE RVUs for “specified non-facility services” by 10% in CY 2024, and 15% in CY 2025
Clinical Labor Coalition statement on 2022 omnibus
Clinical Labor Coalition 2022 year-end priorities
Official 2021 Letter from the Clinical Labor Coalition to CMS on the 2022 Proposed Cuts.
Legislative Efforts
Strengthening Medicare for Patients and Providers Act
The Strengthening Medicare for Patients and Providers Act, introduced by Representatives Raul Ruiz, M.D. (D-CA-25), Larry Bucshon, M.D. (R-IN-08), Ami Bera, M.D. (D-CA-06), and Mariannette Miller-Meeks, M.D. (R-IA-01), would address payment uncertainty affecting Medicare-participating physicians and a possible physician shortage for Medicare beneficiaries.
The Providing Relief and Stability for Medicare Patients Act
The Providing Relief and Stability for Medicare Patients Act of 2023, introduced by Representatives Gus Bilirakis (R-FL-12), Rep. Tony Cardenas (D-CA-29), Greg Murphy, MD (R-NC-3), and Danny Davis (D-IL-7), would mitigate cuts to office-based specialists for a targeted group of services for two years, avoiding significant disruptions in patient access to care while overall concerns regarding the future of Medicare physician payments are addressed. This targeted relief would occur by providing an increase to the non-facility practice expense relative value units (PE RVU’s) for those procedures performed in an office-based setting that need an expensive medical device or piece of medical equipment and thus were most negatively impacted in the 2022 Medicare Physician Fee Schedule (PFS) with the updating of the clinical labor costs in the budget neutral practice expense methodology.