A Bipartisan House Bill Aims to Reshape Physician Compensation Amid Rising Operational Costs
A new legislative proposal, the Patients First Act, introduced by bipartisan physician leaders in the U.S. House of Representatives, targets long-requested reforms in the annual adjustments to physician compensation. The bill seeks to address the growing concerns over the rising cost of operating medical practices, which have outpaced reimbursement rates.
Revising the Reimbursement Formula
The Patients First Act proposes to replace the current reimbursement formula established under the 2015 Medicare Access and CHIP Reauthorization Act (MACRA) with a new system. This system would tie physician reimbursement to an inflationary measure by taking the Medicare Economic Index and subtracting one percentage point. This change aims to better align compensation with the increased costs faced by medical practices.
In a statement, Rep. John Joyce, MD, R-Pennsylvania, a co-sponsor of the bill, emphasized the necessity of Medicare reimbursement reform, stating, “To prioritize patients over politics, we worked together to develop this comprehensive legislation to address a system that has undermined patients’ access to affordable, medical care in their communities for far too long.”
Incentives for Value-Based Care
To further promote value-based care, the bill proposes that participants in alternative payment models (APM) receive a slightly higher conversion factor, with an additional half percentage point over the MACRA provision. Rep. Greg Murphy, M.D., R.N.C., another co-sponsor, introduced a measure to cap annual conversion factor changes at 2.5%, preventing significant fluctuations in physician reimbursement.
The legislation also grants the Centers for Medicare and Medicaid Services (CMS) more flexibility in rulemaking, raising the budget neutrality threshold to $57.6 million plus inflation adjustments every five years, compared to the current $20 million.
Primary Care Hybrid Payment Pilot
An innovative aspect of the bill is the establishment of a primary care hybrid payment pilot program. This initiative would allow independent physicians to receive a capitation fee along with a portion of their traditional fee-for-service reimbursement per member per month. The move is designed to provide financial stability to primary care providers, ensuring they can remain independent.
Introducing the Patient Outcome Improvement National Tabulation System (POINTS)
The bill outlines a new system to succeed the performance-based incentive payment system (MIPS), named the Patient Outcome Improvement National Tabulation System (POINTS). This system is intended to be more flexible and includes a care efficiency category alongside the MIPS quality and resource utilization categories. POINTS metrics would be recommended by a physician-led task force, reducing administrative burdens. A five-year transition from MIPS to POINTS is planned, with a reduced financial penalty or bonus on provider ratings.
Supporting Independent Practices
Rep. Kim Schrier, MD, D-Washington, highlighted the importance of the bill in addressing the primary care crisis in the U.S., stating, “This bill provides stability to independent practices, reduces bureaucracy and burdensome paperwork, and invests in primary care.”
Positive Reaction from Medical Associations
The bill has received wide acclaim from various medical associations. Willie Underwood III, MD, president of the American Medical Association, praised the bipartisan effort, highlighting the challenges faced by physician practices due to inflation-adjusted cuts in Medicare reimbursement since 2001.
Jerry Penso, MD, president and CEO of the American Medical Group Association (AMGA), expressed encouragement over the inflation-related salary updates and the mandatory model rulemaking process. Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, called the bill “a critical first step” in addressing financial and administrative burdens.
Ann Greiner, president and CEO of Primary Care Collaborative, lauded the hybrid payment model for improving healthcare delivery, while the American Academy of Family Physicians described the bill as a modernization of a historically undervalued payment system for primary care.
The introduction of the Patients First Act represents a significant legislative effort to stabilize physician compensation and address the financial challenges faced by medical practices. For more details on the bill, you can view the original article here.
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