Another Year, Another Medicare Fee Schedule, Another Cut to Physician Payment
2025 Medicare Physician Payment Rule Proposes Cut for 5th Straight Year
On September 9, 2024, the Alliance of Specialty Medicine submitted detailed comments to the Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure on policy proposals included in the CY 2025 Medicare Physician Fee Schedule (MPFS) proposed rule. The Alliance, representing over 100,000 specialty physicians from 16 societies, highlighted several key concerns and made multiple recommendations to improve specialty care access through Medicare payment and policy.
Payment Proposals
The proposed rule proposes another sharp reduction in Medicare payments to physicians, estimated at 2.8%, due to the implementation of statutory requirements and regulatory changes. This is the 5th straight year that physicians will have to endure a cut. By contrast, CMS finalized sizeable increases in most other Medicare provider 2025 payment rates (e.g., inpatient hospitals (2.9%), inpatient rehabilitation facilities (3.0%), hospices (2.9%), and Medicare Advantage plans (3.7%). Like these other Medicare providers, physician practice costs have increased considerably over the past several years. The increased costs disproportionately impact practices serving small, rural, and underserved beneficiaries — yet physician updates do not meaningfully consider the impact of inflation.
In response to this cut, the Alliance called on CMS to collaborate with Congress on a permanent fix to ensure that physician payment rates reflect practice costs, emphasizing the impact of inflation over the last several years. Legislative fixes such as the Strengthening Medicare for Patients and Providers Act (HR 2474), the Provider Reimbursement Stability Act (HR 6371), and the Physician Fee Stabilization Act (HR 4935) have broad support from the physician community.
Quality Improvement
The Alliance expressed concerns about transitioning from the traditional Merit-Based Incentive Payment System (MIPS) to MIPS Value Pathways (MVPs), highlighting gaps in applicable measures for many specialties. Specialists urged CMS to retain flexibility for clinicians and avoid mandating subgroup reporting, which could burden multi-specialty practices without meaningful improvements in quality measurement. The Alliance also supported CMS’s proposal to revise the cost performance category scoring methodology, which would reward clinicians with median performance more fairly, and recommended that CMS retroactively apply these improvements to previous performance years or, at a minimum, zero out the weight of the cost category for prior years.
Next Steps
Congress is scheduled to reconvene after the November elections. This ‘lame duck’ session is expected to be quite busy, primarily focused on funding the federal government for the fiscal year 2025. The Alliance will advocate that Congress also address the scheduled 2.8% cut and ask that measures to stabilize future Medicare payment policies are prioritized when the new Congress begins in January. For further reading on the Alliance of Specialty Medicine’s views on Medicare payment, please see their letter to the Senate Finance Committee.
SpecialtyDocs Head to the Hill
The Alliance of Specialty Medicine held its annual Legislative Advocacy Conference in Washington, DC, in July. Nearly one hundred specialists from across the country came to town to advocate for greater access to specialty care.
Attendees had the opportunity to hear from Members of Congress about pending legislation related to Medicare physician payment and prior authorization. They also heard from an attorney about how the Supreme Court’s Chevron ruling may impact future legislation and the rulemaking process. Discussions about Medicare Advantage, the Medicare Physician Fee Schedule proposed rule, and needed reforms to Prior Authorization dominated the sessions.
The specialtydocs then collectively met with more than 100 congressional offices to request support for Medicare physician payment reform, prior authorization and step therapy legislation, as well as an increase in the number of Medicare-funded graduate medical education slots.
The Alliance will continue to advocate for these issues as Congress wraps up its session at the end of the year. Issue briefs on all these issues can be found on the Alliance Website.
The No Surprises Act: A Timeline of Frustration
Negotiations have been complex and laden with disagreements since the No Surprises Act was signed into law in December 2020.
The No Surprises Act (NSA), signed into law on December 27, 2020, is a significant piece of healthcare legislation aimed at protecting consumers from unexpected
medical bills. The NSA addresses the issue of surprise medical billing, which occurs when patients receive unexpected bills from out-of-network providers, often for emergency services or when receiving care at an in-network facility. This was a source of financial strain and frustration for many patients across the United States.
The history of the NSA can be traced back to years of bipartisan efforts to address the problem of surprise medical billing. Negotiations between stakeholders, including specialties and the broader physician community, were often complex and laden with disagreements over how to resolve billing disputes and establish fair reimbursement rates for out-of-network services. Eventually, Congress reached a bipartisan solution.
Key Provisions of the No Surprises Act
- Protection from Surprise Bills
The Act prohibits surprise billing in certain situations, such as emergency services provided by out-of-network providers or non-emergency services performed at in-network facilities where patients did not have the opportunity to choose an in-network provider. - Limiting Patient Responsibility
Patients are only responsible for paying their in-network cost-sharing amounts, such as copayments, coinsurance, and deductibles, even if they receive care from out-of-network providers in the situations outlined by the NSA. - Independent Dispute Resolution
The Act establishes a process for resolving disputes between healthcare providers and insurers over out-of-network charges. This process involves an independent arbiter who considers various factors, including the median in-network rate for the service in question, when determining the final payment amount.
A key aspect of this law is a fair and balanced independent dispute resolution (IDR) process, which has the potential to create challenging situations for physicians. Imagine that you have already chosen to remain out-of-network with a specific plan, likely because its contract rates were not appropriate. This law now forces you to the negotiating table with that same insurer. Congress knew this and carefully included a broad range of factors that the arbiter must consider during these negotiations. Properly implemented, the NSA, as conceived, could work well for everyone. Unfortunately, this did not happen.
Tipping the Scales Toward Insurers
On July 1, 2021, the U.S. Departments of Health and Human Services, Labor, and the Treasury (the Departments) released the Interim Final Rule (IFR): Requirements Related to Surprise Billing, Part I. This regulation defined many of the key terms in the NSA and how they would be applied. Immediately, there were concerns from the physician community. The primary issue involved the definition of the qualifying payment amount (QPA). In short, the QPA is intended to be the median in-network rate for a plan. However, this rule required the QPA to be calculated in such a way that it would usually end up being much lower than the median in-network rate.
On September 10, 2021, the Departments issued the IFR: Requirements Related to Surprise Billing, Part II. Again, the rules presented major concerns, specifically regarding the QPA. The NSA includes the QPA as one factor, among many, for the arbiter to consider in the IDR process. However, these final rules made the QPA the primary factor of consideration. In fact, the rules required arbiters to choose whichever offer was closest to the QPA. This tilted the entire process in favor of insurers. Essentially, physicians were forced to accept the median in-network rate as payment in full for out-of-network care — the same rate a physician refused to accept in the first place.
The physician community expressed strong concern that these rules were unacceptable and quickly took action. Two lawsuits were filed against the Department of Health and Human Services (HHS). The Texas Medical Association (TMA) filed suit on October 28, 2021, and the American Medical Association (AMA) filed suit on December 9, 2021. Several specialty medical societies joined amicus briefs in support of the lawsuits. The physician organizations in these suits argued that heavily weighing the QPA in the IDR process goes against both Congressional intent and the written language of the law.
While these suits were pending final rulings, the NSA took effect on January 1, 2022, with the flawed rules in place.
Problems Begin Immediately
Almost immediately, the consequences of the law’s flawed implementation came to fruition. As predicted, many providers were kicked out of networks with plans they had contracted with for many years. Insurers took this action because the implementation of the NSA essentially forced out-of-network providers to accept the median in-network rate, which insurers have ways to deflate artificially. In addition, HHS was woefully underresourced for the number of disputes it needed to handle. HHS received over 90,000 claims in the first few months — well over the amount they expected to receive over the whole year. A backlog quickly built up, and providers waited months for their dispute to be reviewed.
On February 23, 2022, a federal court ruled that the NSA arbitration process implemented by HHS violated the Administrative Procedure Act, delivering a win to the TMA. The court agreed that the Administration’s rules did not follow the language of the law and unfairly tipped the scales in favor of insurers. The AMA dismissed its own suit after this ruling, as this was the ruling they were ultimately seeking.
While this should have been the end of the problems, it was only the beginning. On August 19, 2022, the Department released its updated final rules for the NSA. Although the rules were different, the key issue persisted; the Administration still gave preferential treatment to the QPA in the IDR process. The TMA filed suit again on September 22, 2022, arguing once again that the Administration was not following the law as written. Several specialty medical societies also joined an amicus brief supporting this suit.
Meanwhile, the situation continued to deteriorate. It became clear that insurers had taken advantage of the rules and were doing everything they could to deflate the QPA artificially. This left many physicians between a rock and a hard place. They could either go in-network and accept a low rate or risk going through arbitration and be forced to take the low rate anyway, in addition to paying a non-refundable administrative fee to enter arbitration. So, even if a physician won their claim, the financial gain may not be what they hoped.
On November 30, 2022, the TMA filed a third lawsuit against HHS. This suit argued that portions of the rule allow for artificial deflation of the QPA. The argument largely centered on the concept of “ghost rates.” Ghost rates occur when an insurer’s contract includes contract rates with providers who do not actually provide the service in question. The TMA said this unfairly lowers QPAs “as there is little motivation for physicians or providers to negotiate rates for services they do not actually provide.” For example, a gastroenterologist is not concerned with how much an insurer will reimburse them for a septoplasty because they will never perform that procedure. However, the insurer could include an artificially low reimbursement for a septoplasty in their contract, therefore lowering the median in-network rate for all.
Soon after, on December 18, 2022, HHS abruptly announced that they would raise the administrative fee for arbitration from USD 50 to USD 350 (a 600% increase). This is the non-refundable fee both sides must pay to enter arbitration. This was problematic for two reasons. First, the change was announced without time to allow for public comments. Second, a USD 350 fee makes the process prohibitively expensive for many providers, particularly given that the amount many providers seek for each claim is often less than that. Thus, going through the IDR process became meaningless in many cases. The TMA filed a fourth lawsuit over this fee increase the following month.
The Courts and Congress Step Up
On February 6, 2023, the court ruled in favor of the TMA in its second lawsuit, deciding that the revised arbitration process “continues to place a thumb on the scale” in favor of insurers and that “the challenged portions of the final rule are unlawful and must be set aside.” HHS would once again need to go back to the drawing board and create rules that properly reflect the law, including a balanced IDR process.
HHS filed an appeal to this ruling on July 12, 2023. That appeal is still pending a final verdict. Meanwhile, HHS has had to issue guidance in the interim. As it stands, certified IDR entities can still consider the QPA and other relevant factors. Certified IDR entities may request, and disputing parties may provide, additional information relevant to the submitted QPA. However, there is no official rule about how an IDR entity should specifically use the QPA as HHS waits for a ruling on its appeal. With this uncertainty, IDR payment determinations may be inconsistent, with different certified IDR entities applying different policies when considering QPAs.
In August 2023, the court handed losses to HHS in the third and fourth cases that the TMA brought against it. The courts found that the rules allowed the QPA to be inappropriately deflated and that the hike in the administrative fee to $350 violated notice and comment requirements. HHS quickly lowered the fee back down to $50 but issued a proposed rule in October 2023 that brought the fee back up to USD 150 on January 1, 2024. HHS submitted an appeal to the ruling in the third case on the calculation of the QPA on January 12, 2024. That appeal is still pending a final ruling.
As HHS repeatedly lost in court, Congress began to take note of the situation. Physician organizations made legislators aware that HHS was not following Congressional intent. The law was not being followed as written and physicians were facing the consequences. Backlogs continued to plague the system. Further, it was coming to light that many insurers were not paying out the claims they owed, even after losing disputes in the arbitration process.
On September 19, 2023, the House of Representatives Ways and Means Committee held a hearing on the flawed implementation of the No Surprises Act. Committee Chair Jason Smith (R-MO) noted that, “Rulemaking has unfortunately ignored congressional intent.” Ranking Member Richard Neal (D-MA) concurred with this observation, declaring, “We will continue to work closely with the Administration to ensure that this law is implemented as Congress wrote it.”
During the hearing, the witnesses highlighted most of the key flaws with how the NSA had been rolled out. One of the most shocking testimonies came from a witness with Wellstar Health System, who told the committee that Wellstar was owed USD 40 million from insurers based on arbitration decisions. Wellstar had only received one-third of the payments they were owed. Another witness, an emergency medicine physician, also testified that his practice received multiple letters from insurers that they were reducing their contracted rates and that if they did not accept them, they would be kicked out of network. Approximately 10% of his practice’s patients were pushed out of network. Overall, the hearing highlighted one key point: the Administration was not following the law as written and, as a result, was wreaking havoc on physicians and health systems across the country.
On March 18, 2024, 39 members of the House of Representatives signed a letter to the Secretaries of HHS, the Department of Labor, and the Department of the Treasury. The letter outlined their concerns and urged the Departments to implement the law properly. It states that many issues remain unresolved related to “The qualified payment amount (QPA), network shrinking, compliance, and enforcement with statutorily required payment timelines. Tracking and ultimately addressing such issues will be key to the long-term success of the NSA in resolving disputes and ensuring patient access to care.”
Where We Stand Today
While positive progress continues in the courts and Congress, the situation is largely in a holding pattern. Two appeals from HHS are still awaiting a final verdict. The IDR process is currently open, and claims are being processed. However, because of legal uncertainty, guidance from HHS is vague, and arbiters are essentially left up to their own discretion on how to use the QPA. Backlogs persist, but they are improving. Although Congress is acutely aware of the problems, it is holding back on further legislative action to address them. Legislators continue to agree that the law, as written, is a good one and can work. It is up to the Administration to implement it properly. Once rulings on the appeals are made, Congress may then explore legislative solutions.
Specialty physicians and the broader physician community are committed to voicing concerns with both the Administration and Congress to ensure that this law is implemented in a way that helps physicians and patients alike.
Originally published in The Bulletin, the official content hub of the American Academy of Otolaryngology-Head and Neck Surgery. It has been edited for content.
A Case For Prior Authorization Reform
John C. Lipman, MD, FSIR
My patient was in tears in my office when she learned that United Health Care (UHC) had rejected coverage for a simple, non-surgical procedure that would give her back her quality of life.
She had a thickening of the area deep into her uterine lining called adenomyosis, a condition that causes severe pelvic pain and heavy menstrual bleeding. It has disrupted her everyday life. For several days a month, she could not leave home due to this heavy bleeding and debilitating pain.
Her gynecologist told her the only option was a hysterectomy. Still, my patient wasn’t ready for major surgery or the major life changes it would bring about at age 41—sexual dysfunction such as loss of libido or loss of orgasm, significant bone loss, sudden menopause, and pelvic floor disorders such as urinary incontinence, not to mention the long-term risks, such as an increased risk of cardiovascular disease.
I was able to offer hope through an interventional radiology, non-surgical, outpatient procedure called uterine artery embolization (UAE), which reduces blood flow to the uterus, thinning the uterine lining and lightening menstrual flow, alleviating pain and cramping. However, through their so-called “peer review process,” UHC said no.
UHC’s reason for rejection: They claim there is not enough evidence to support this treatment despite numerous studies over the years showing UAE is safe and effective for adenomyosis and my own professional experience for over 25 years with this treatment. The medical “peer” who rejected this course of treatment was not an interventional radiologist, like me, or even a gynecologist. He was a retired pediatrician, a specialty well-known for caring for children, however children never suffer from adenomyosis.
From his vast experience in adult healthcare, the pediatrician suggested another treatment—endometrial ablation—even though the ablation procedure is not indicated for adenomyosis; in fact, it worsens the bleeding in these patients.
This is just one example of the unconscionable bean-counting approach UHC and other healthcare insurance companies take to coverage. They employ physicians with no background in the cases they review and allow them to make life-and-death decisions based on cost, not patient welfare. 
There is something that we can do to change this: We must reform prior authorization and coverage requirements nationwide—now!
The first change we should make is to the “peer review” process to ensure actual peers are reviewing cases. The physician reviewing the case must have the clinical expertise to treat the medical condition under review and have knowledge of the current, evidence-based clinical guidelines and the novel treatments available.
We should also consider requiring the peer reviewer to follow evidence-based guidelines consistent with those of the national medical specialty society representing the specialist making the request.
Additionally, we should eliminate unnecessary barriers to care. Prior authorization requirements can take two weeks or more to secure and delay much-needed patient care. Not only is there a precertification needed for the UAE procedure, but there is also now a requirement for MRI imaging prior to the procedure, which can take weeks to schedule. As women of color disproportionately suffer from adenomyosis, this is one more health disparity for women who are already marginalized by the inequitable health care system.
Finally, once precertification is obtained and the services are rendered, we should mandate guaranteed payment. While one might assume this to be preordained, the insurers explicitly state that precertification is not a guarantee of payment.
As a medical doctor, it infuriates me that insurance companies make medical decisions that delay or prevent much-needed appropriate care while at the same time receiving record profits. Is it any wonder how United Health Care had revenues of over $371 billion in 2023?
We should not have insurance companies second-guessing the medical judgment of physicians familiar with the case and the patient, particularly when there are years of peer-reviewed medical literature to support the safety and efficacy of UAE for adenomyosis.
“Health” insurance companies appear driven by profit and not the patient. An increasing amount of the cost of the care that is allowed is being shifted onto doctors and their patients while the “insurers” rake in record profits. We need legislative relief to ensure patients receive the care that they deserve.
John C. Lipman, MD, FSIR, is a board-certified interventional radiologist and founder of the Atlanta Fibroid Center. He is globally recognized for his unparalleled expertise in women’s health treatments, particularly the use of uterine artery embolization (UAE) for the treatment of fibroids, adenomyosis, and other uterine conditions. He is a renowned researcher, contributing extensively to academic and medical journals. Through his research, he advances the understanding and treatment of fibroids, solidifying his position as a leading authority in the field.
Helping the Public Protect Vision as They Age During Healthy Aging Month
As you age, your risk of developing sight-threatening retinal conditions, including age-related macular degeneration (AMD) and diabetic retinopathy, increases. However, vision loss and blindness are not an inevitable part of aging. Fortunately, older Americans can take simple steps to protect their sight.
During September’s Healthy Aging Month, the American Society of Retina Specialists encouraged older Americans to learn more about retinal disease and adopt healthy habits that bolster retina health. Not only is healthy vision critical to maintaining an active lifestyle as you age, but studies show that older adults with vision issues face a higher risk of developing dementia.
- Learn the signs and symptoms of common adult retinal conditions. AMD affects 19.8 million Americans and is the leading cause of vision loss among older Americans. Another retinal condition, diabetic retinopathy, affects 9.6 million Americans and is the leading cause of blindness in U.S. working-age adults.
Hallmark symptoms of AMD include distortion (warping) of straight lines, a decrease in the intensity or brightness of colors, a gradual or sudden loss of central vision, and dark, blurry areas in the center of vision.
Diabetic retinopathy symptoms to watch for include blurry central vision, seeing spots, floaters, or a shadow across the field of vision, difficulty reading, eye pressure, and difficulty with color perception.
- Know your family history and other retinal disease risk factors. Ask family members if they have had vision issues. Retinal conditions, including AMD, diabetic retinopathy, and even retinal detachments, may have a genetic component that runs in families. Other common risk factors of retinal disease include older age, smoking, and high blood pressure and cholesterol.
- Make healthy retina habits a priority. People of all ages can maintain healthy retinas and reduce the risk of developing retinal conditions by:
- Quitting smoking
- Staying active
- Controlling blood sugar, blood pressure, and cholesterol
- Eating nutritious food, including dark, leafy greens and fish
- Maintaining a healthy weight
- Getting regular dilated eye exams
- Seek out a Retina Specialist for expert care. Retina specialists are medical doctors with up to 10 years of advanced medical training to specialize in ophthalmology and sub-specialize in diseases and surgery. They are highly skilled physicians and surgeons committed to helping people with retinal conditions preserve and improve their vision. Find your retina specialist at org.
- Do your homework before signing up for or switching health insurance plans. During open enrollment, October 15, 2024, through December 7, 2024, Americans eligible for Medicare can join, switch, or drop an Original Medicare Health Plan or Medicare Advantage Plan. Consumers should ask if an insurance plan requires preauthorization for any tests or procedures or if it requires step therapy for any medications. “Fail first” step therapy is a policy Medicare-eligible retina patients should be aware of as it can affect a patient’s ability to receive treatment recommended by their retina specialist. Fortunately, Original Medicare does not allow step therapy. Access resources about Medicare open enrollment, learn about step therapy and research your options before making changes to your insurance that could affect your access to retina care.
For more information about maintaining retina health for good vision, visit asrs.org/patients.