It’s no secret to allergy practices that Medicare payments have not kept pace with rising operating costs. Inflation and other factors have only caused operating costs to increase while annual updates to Medicare reimbursement have alternated between years of negligible increases or net decreases. There is now a growing acceptance within certain policymaking bodies that this trend cannot continue. MedPAC’s March Report to Congress is the most recent – and perhaps most notable – body to recognize this issue.
MedPAC is a nonpartisan agency of the U.S. Congress that was created to advise Congress on Medicare payment policy. While not a policymaking body itself, its recommendations are very influential. MedPAC produces two reports a year, one in March and a second in June. These reports make nonbinding recommendations to Congress and also assess various aspects of Medicare payment policy. MedPAC holds meetings throughout the year to discuss payment policy issues and potential recommendations to solve those issues.
Every year, MedPAC assesses the adequacy of Medicare payments. The criteria it uses to assess payment adequacy focus on whether practices have enough capital and if Medicare beneficiaries have access to health care services. This is a narrow way of looking at the issue. Using this approach, MedPAC always finds that Medicare payments are indeed adequate. However, in recent months, MedPAC has started to analyze Medicare payment adequacy from a different (and more direct) angle: how Medicare reimbursement compares to inflation.
During its December meeting, the staff presentation to MedPAC included a slide that shows how Medicare payment rate increases compare to Medicare Economic Index (MEI) increases over the same time. Unsurprisingly, the chart shows a major disparity between MEI growth and updates to physician payments.
This chart prompted a call to action from the medical community. ACAAI signed onto a letter to Congress led by the American Medical Association (AMA) urging Congress to update Medicare payments in alignment with changes in the MEI.
Even though Medicare payments have lagged behind inflation, total Medicare spending has continued to grow. Medicare spending grew by 8.4% in 2021 compared to the previous year, reaching a total of over $900 billion. As a result, Congress and CMS are highly motivated to control Medicare spending growth.
Ultimately, the MedPAC March Report is recommending a 1.45% increase to Medicare reimbursements to physicians. This increase would certainly be a step in the right direction, but it does not account for the historic disparity between Medicare payments and MEI. Congress is not obligated to act on any of MedPAC’s recommendations. That being said, ACAAI will continue to prioritize higher and more rational Medicare payments in our legislative advocacy.
The Advocacy Council – ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS.
