Medicare physician pay has declined 33 percent over the last 20 years. These declines are unsustainable and threaten patient access to care.

Reform is needed to stabilize Medicare physician payment and is why ASGE supports bipartisan legislation that makes long-overdue reforms of physician fee schedule (PFS) budget neutrality requirements.

Budget neutrality is a statutory mechanism created in 1989. Under current law, increases of $20 million or more to the Medicare PFS — created by upward payment adjustments or the addition of new procedures or services — must be offset by cuts elsewhere in the PFS. This results in lower, across-the-board payment rates for physicians, creating financial pressure as costs outpace reimbursement.

The Provider Reimbursement Stability Act (H.R. 8163) does the following:

• Raises the existing $20 million budget neutrality trigger to $54.3 million.
• Requires the Secretary of Health and Human Services (HHS) to prospectively revise spending estimates and budget neutrality adjustments based on actual after-the-fact utilization rates derived from claims data.

The legislation also:

• Requires CMS to update the direct cost inputs for practice expense RVUs, specifically clinical wage rates, prices of medical supplies, and prices of equipment, simultaneously and no less often than every five years. More frequent updates will mitigate misalignment between reimbursement rates and the actual cost of providing services.
• Requires the HHS Secretary, starting in 2027, to limit increases or decreases to the Medicare PFS conversion factor to no greater than 2.5 percent each year. This cap will help to stabilize PFS payments and create some level of payment predictability.  

The legislation was introduced by the following lawmakers:

Reps. Greg Murphy, MD (R-NC), Tom Suozzi (D-NY), John Joyce, MD (R-PA), Bob Onder, MD (R-MO), Brad Schneider (D-IL), Jimmy Panetta (D-CA), Mariannette Miller-Meeks, MD (R-IA), Kim Schrier, MD (D-WA), and Robin Kelly (D-IL). 

The bill represents a major component of overhauling the Medicare physician payment system. 

Make a difference by asking your representative to cosponsor the bill.