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2023 TEXAS LEGISLATIVE
SESSION WRAP-UP

Reforming Medicare Payment

By Jayesh Shah, MD

T he Medicare payment system in the United States is in urgent gests advocacy linking Medicare payment updates for physicians to the
To address these issues, the TMA-led Resolution to the AMA sug-
need of an overhaul. Over the years, Medicare physician pay-
ments have effectively declined by 26% when adjusted for in-
flation from 2001 to 2023. This decline has put a financial strain on Medicare Economic Index. Additionally, there is a bill referred to the
subcommittee on Health, called the "Strengthening Medicare for Pa-
private practitioners, making it difficult for them to sustain their prac- tients and Providers Act" (HR 2474), which proposes automatic up-
tices. As a result, many of these private practices are being acquired by dates to physician Medicare payment rates linked to inflation. The bill
hospital corporations or private equity funds, leading to increased costs was introduced by California Democratic Reps. Raul Ruiz and Ami
within the healthcare system. Bera, along with Republicans Larry Bucshon of Indiana and Marian-
The shift towards employed physicians is also a continuing trend. nette Miller-Meeks of Iowa.
According to data from the American Medical Association (AMA), Another issue with the Medicare payment system is the Omnibus
approximately 47.4% of patient care physicians in the U.S. were em- Budget Reconciliation Act of 1989, which mandates that estimated in-
ployed directly by hospitals or medical groups in 2020, and this figure creases of $20 million or more to the Medicare physician payment
has been gradually increasing over the years. While Texas has seen rel- schedule must be offset by cuts elsewhere. Organized medicine aims
atively lower percentages of employed physicians compared to the na- to increase this budget threshold from $20 million to $100 million,
tional average, the state is still experiencing this trend. providing more flexibility for adjustments and additions to the pay-
The Texas Medical Association (TMA) has been engaged in legisla- ment schedule.
tive and regulatory advocacy efforts directed at sustaining private prac- Physicians need to engage in advocacy efforts to address the hard-
tices. ships faced by the physician community. Lawmakers need to hear di-
In June 2023, during the Annual Meeting of the AMA, the TMA- rectly from physicians and their patients about the importance of
led resolution on Medicare payment reform was adopted with over- building stability into the Medicare physician payment system to en-
whelming support. The resolution calls for the declaration of Medicare sure the survival of private practices. By preserving private practices,
physician payment reform as an urgent advocacy and legislative priority overall healthcare costs can decrease, and patient access to care can im-
for the AMA. It also emphasizes the need for increased funding for prove.
federal and state advocacy budgets to achieve Medicare physician pay- Within the AMA, each state has delegates based on the number of
ment reform and ensure that Medicare physician payments are annually AMA members from that state. For every 1,000 members, a state is al-
updated at least equal to the annual percentage increase in the Medicare located one delegate in the AMA House of Delegates. I have had the
Economic Index. The resolution further requires the AMA's Board of honor of representing Bexar County and Texas as an AMA delegate
Trustees to report progress in achieving Medicare payment reform at since 2008, alongside other members of the delegation such as Dr.
each Annual and Interim Meetings until a predictable, sustainable and David Henkes, who currently serves as the chair of the delegation, Dr.
fair physician payment system is achieved. Zeke Silva and Dr. Jennifer Rushton.
The previous flawed payment system, known as the Sustainable
Growth Rate (SGR), was successfully removed in 2013, but it was re- References:
placed by the Medicare Access and CHIP Reauthorization Act • AMA: Physicians unite to back cornerstone Medicare pay
(MACRA) rule. MACRA aimed to shift the healthcare system away overhaul
from the fee-for-service model towards a value-based payment system. • A new era of physician employment
While the Centers for Medicare and Medicaid Services (CMS) has
made efforts to promote value-based care, many physicians working in Jayesh Shah, MD, is an undersea and hyperbaric medicine
the field remain skeptical about its ability to increase value and decrease specialist in practice 29 years. Dr. Shah is President of the South
costs. Some solo practitioners and rural physicians have been particu- Texas Wound Associates, a re-elected AMA delegate, and mem-
larly impacted, leading to the closure of their practices and a risk to pa- ber of the BCMS Board of Directors and TMA’s Board of Trustees.
tient access to care.

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