HHS Head Signals Support for Medicare Physician Payment Reform

Recent remarks by the top U.S. health official offer some hope for Medicare physician payment reform. U.S. Secretary of Health and Human Services Xavier Becerra responding to a question about the 2023 payment cuts at a news conference last week, stating he was “definitely interested” in discussing the issue with Congress.

The agency cannot address the underlying issues on its own. A long-term fix requires Congress to act. Though Becerra’s comments were brief, they had three key takeaways for medicine:

1. He showed an understanding of the underlying and recurring nature of the problem. And he expressed concern that recurring fee cuts could drive some physicians to leave the profession, threatening access to care.
2. He seemed sympathetic to our position, noting that the COVID-19 pandemic has shown the importance of physicians’ work and health care workers more broadly.
3. Lastly, he showed his experience and understanding of the process required to fix the issue — recalling how, in his 20-plus years representing Californians, Congress dealt repeatedly with fixes to the Medicare physician fee schedule due to the sustainable growth rate. 

Becerra also noted the need to scrutinize Medicare Advantage payments, especially given last year’s report of significant fraud in some plans’ billing. He announced that HHS will step up its oversight of Medicare Advantage and suggest to Congress reforms to increase the Medicare program’s value to beneficiaries. He acknowledged concerns about overpayments in Medicare Advantage and said his agency is looking closely at some aspects of the program’s payment system. 

Becerra’s statement seems to conflict with Centers for Medicare & Medicaid Services’ recent payment proposal that could increase Medicare Advantage plans’ revenue 8% in 2023. The American Medical Association has raised concerns about this plan.

“Freezing physician payment is also impossible to reconcile when viewed against the nearly 8% payment increase the Centers for Medicare & Medicaid Services projects for Medicare Advantage plans in 2023,” according to an American Medical Association letter to congressional leaders.

The Medicare Payment Advisory Commission has also raised concerns about Medicare Advantage plans. In its recent annual report to Congress, the commission said the plans “need to face appropriate financial pressure similar to what the Commission recommends for providers in [Medicare Part B].” The commission has repeatedly called for changes to aggressive coding inflation and incomplete encounter data. 

Congress responded to the Academy and medicine’s advocacy and acted to avert the 9% cuts scheduled for 2022, but only provided a one-year fix. Sequestration cuts resume next month and other statutory cuts take effect at the beginning of 2023.  

Unless Congress intervenes, a 1% sequestration cut resumes April 1. The cut will then increase to the full 2% July 1. W

Medicare physician payment reform is the Academy’s top advocacy priority. We continue to work on this issue with numerous other societies. Academy members will also raise the issue with legislators during visits with lawmakers on Congressional Advocacy Day, April 7.