The Alliance of Specialty Medicine wrote to the joint leadership of the Energy and Commerce Committee and Health Subcommittee to share its ideas on Medicare physician payment reform and opportunities to better measure and reward high-value care among physicians. The letter was admitted into the record of the Health Subcommittee’s May 20th hearing, “Examining the Medicare Physician Fee Schedule, MACRA, and Opportunities for Payment Reforms.”
In its letter, the Alliance reminded the Health Subcommittee that Medicare physician payments have declined by 33% from 2001 to 2025 when adjusted for inflation, due to the lack of automatic inflation updates in the Medicare Physician Fee Schedule (MPFS) established by MACRA. The MPFS is hampered by budget-neutrality requirements, irregular updates to practice expense data, and misestimation of service utilization, resulting in recurring cuts to the conversion factor, which has decreased from nearly $36 in 2016 to about $33.40 in 2026. The Alliance also zeroed in on the Merit-Based Incentive Payment System (MIPS), which has become overly complex, burdensome, and clinically irrelevant for many specialists, with little evidence that it improves quality or outcomes. In addition, the Alliance described current barriers to specialist participation in alternative payment models (APMs).
Among its reform recommendations, the Alliance recommended that Congress provide a permanent, inflation-based update equal to the Medicare Economic Index (MEI) without reductions or caps. The Alliance also recommended that Congress modernize the budget neutrality mechanism by increasing the threshold, indexing it to MEI every five years, requiring that direct cost calculations and valuations be updated every five years in consultation with relevant stakeholders, and limiting year-to-year variance of the conversion factor to 2.5%. The Alliance has endorsed H.R. 8163, the Provider Reimbursement Stability Act, which would address the budget neutrality mechanism.
Regarding MIPS, the Alliance urges Congress to grant CMS authority to better incentivize the adoption and use of specialty-specific quality measures; further promote registry participation and streamline interoperability requirements; ensure that cost metrics evaluate physicians on actions within their direct control while accounting for changes in quality; and provide specialties and their registries unimpeded access to Medicare claims data to better understand existing gaps in care and support the development of new metrics.
To ensure specialists have opportunities to engage meaningfully in APMs, the Alliance requested that Congress require CMS to release specialty-specific participation and performance data for its tested models. It also would like to see the CMS Center for Medicare and Medicaid Innovation (CMMI) adopt more transparent processes, guided by clinical expertise, when developing and evaluating models. The Alliance also requested that Congress restore and extend the full 5% APM Incentive Payment authorized under MACRA and lower eligibility thresholds to facilitate specialists’ movement into APMs. Finally, the Alliance urged Congress to terminate the deeply flawed and mandatory Ambulatory Specialty Model (ASM) scheduled to begin in 2027. You can access the entire letter by clicking on the link below.
Alliance Letter to House Energy and Commerce Committee MACRA Reform Hearing
