ASN and Other Groups Urge Congress to Maintain Increase to Conversion Factor
ASN has joined a broad range of medical societies and other health care groups representing over one million physician and non-physician health care providers in requesting that Congress (see letter) step in to ensure greater financial stability in the Medicare program for 2022 and 2023.
On July 13, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the 2022 Medicare Physician Fee Schedule (MPFS). In the proposed rule, CMS was forced to deal with a projected 3.75% reduction in the conversion factor (CF), signaling a 3.7% pay cut for nephrologists. These cuts were originally slated for 2021, but in December 2020 Congress delayed that reduction until 2022.
ASN and other groups are urging Congress and the Administration to make a critical investment in the nation’s health care delivery system by maintaining the 3.75% increase to the CF through at least calendar years 2022 and 2023.
Medicare payments have been under pressure from CMS’ anti-inflationary payment policies for more than 20 years. While physician and non-physician provider services represent a very modest portion of the overall growth in health care costs, they are perennial targets for cuts when policymakers seek to limit spending. Medicare provider payments have remained constrained by a budget-neutral financing system. Updates to the CF have failed to keep pace with inflation, and the result is that the CF today is only about 50% of what it would have been if it had been indexed to general inflation starting in 1998.
In addition, the cost of running a medical practice increased by 37% between 2001 and 2020, which equates to 1.7% per year, when measured by the Medicare Economic Index (MEI). Adjusted for inflation in practice costs, Medicare physician pay declined 22% from 2001 to 2020, which equates to a 1.3% per year average reduction.
The coalition asks Congress to recognize the need for critical reforms to the MPFS system, including addressing the budget neutrality requirement, which can lead to arbitrary reductions to reimbursement unrelated to the cost of providing care. With a "zero-sum" structure in the MPFS, physicians, therapists, and other health care providers are forced into an adversarial role when fee schedule payment policies are developed and/or implemented.
This coalition is asking Congress to work with professionals across the health care spectrum to address long-term challenges associated with Medicare payment policy, especially the budget neutrality provision that has precipitated these steep cuts.