January 20, 2022

MedPAC Commissioners Unanimously Recommend 2023 Base Payment Rate Update for Physicians

The Medicare Payment Advisory Commission (MedPAC) met virtually Jan. 13, and discussed assessing payment adequacy, and updating payments for inpatient and outpatient hospital services, and physicians and other health professional services. The mandated report on the Bipartisan Budget Act of 2018 (BBA) changes to the low-volume hospital payment adjustment was also covered.

There have been two policy changes to MedPAC’s payment adequacy framework for acute care hospitals and the impacts of the COVID-19 public health emergency since the December meeting. The first is that Congress suspended a 2% Medicare payment cut required under the 2011 Budget Control Act for three months — through March 31, reduces that cut from 2% to 1% and then suspends that (1%) cut for three months through June 30. The second is that the U.S. Department of Health and Human Services (HHS) began distributing $9 billion in provider relief funds for phase 4 payments. MedPAC employees projected Medicare margins for 2022 remain unchanged with these new policies.

MedPAC Commissioners in their report unanimously recommend:

  • Congress for 2023 update the 2022 Medicare base payment rate for physicians and other health professional services by the amount determined under current law.
  • The Secretary of the U.S. Department of Health and Human Services require clinicians to use a claims modifier to identify audio-only telehealth services to collect more Medicare claims data for audio-only telehealth services to better assess the impact on access, quality and cost.

Increased practice expense was discussed as well, with commissioners highlighting that there is no market basket update equivalent for physician services, which creates a disparity between physicians and hospitals. They also cited inflation as a driver for a payment update. MedPAC's chair noted that the commission's future cycle work will look closer at workforce issues and continue their work on site-neutrality.

For more information, contact Kimberly Greck, Economic Policy Analyst or Christina Berry, Team Lead, Economic Policy.