“Rfk jr officially confirmed as HHS secretary today. Physician payment cuts are increasingly likely. Anything that can be done to mitigate this? Typically we just bill much higher, right?”
RFK Jr. wants to change how Medicare pays doctors
Robert F. Kennedy Jr., President-elect Donald Trump's pick to lead HHS, is reportedly exploring a proposal that would minimize the role played by the American Medical Association in determining what Medicare pays for medical services. Here's what you need to know.
www.advisory.com
Since the early 1980s, the U.S. government has relied on AMA to maintain billing codes, also known as the "current procedural terminology" (CPT) codes, to determine how roughly a fifth of Medicare Part B's budget is spent.
Specifically, AMA runs a panel of doctors called the Relative Value Scale Update Committee (RUC) that meets three times a year to discuss how physician services should be priced, factoring in things like the amount of time a service or visit takes and how much practices spend on supplies and malpractice insurance.
The RUC then sends its recommendations to Medicare, which publishes physician payment updates each year. Medicare isn't required to accept the RUC's recommendations, but it does between 60% to 80% of the time, according to estimates from the Government Accountability Office.
According to people familiar with the process who spoke to the Financial Times, Kennedy is working on plans that would reduce the role played by AMA in determining Medicare payments. He is instead considering how the process could be done by CMS.
Kennedy has previously decried the influence of big business in the healthcare industry and promised to "free the agencies from the smothering cloud of corporate capture."
In a post on X following his nomination as HHS secretary, Kennedy said he would "clean up corruption, stop the revolving door between industry and government, and return our health agencies to their rich tradition of gold-standard, evidence-based science."
Currently, control of medical billing codes is a significant source of revenue for AMA, as the group charges royalties for the use of its CPT codes. According to AMA's most recent annual report, more than half of its revenue in 2023, or $266 million, came from the budget category that includes CPT books, workshops, and data files, though that category also includes revenue from products unrelated to CPT codes.
Removing AMA from the process of determining Medicare payment prices has been considered before by members of congress. In the early 2000s, former Sen. Trent Lott (R-Miss.) asked HHS to end AMA's "monopoly" over billing codes, and former Sen. Tom Coburn (R-Okla.) in 2009 accused AMA of supporting the Affordable Care Act to protect its medical billing code revenue.
The RUC has also drawn criticism from health policy experts in the past, who have argued it's unethical and a conflict of interest for physicians to set their own Medicare payment rates.
Robert Berenson, a physician, former CMS official under the Clinton administration, and fellow at the Urban Institute, said in 2022 that RUC's recommendations are often based on unreliable data and are biased toward specialties that perform higher-priced procedures.
"It's amazing that other clinicians accept it, which suggests that it's really a political process and not an objective evaluation of work," he said.
However, Berenson added that changes to the codes "would cause chaos without a flight plan about what's next."
Berenson noted that some other Medicare billing codes are already determined by CMS, but he said that even if an alternative was found, doctors and AMA would be "very unhappy" with the change.
If RFK Jr Messes With Medicare Payments, Physicians Will Fight Back
RFK Jr., Trump's pick to lead HHS, says he wants to reform the way Medicare pays physicians. But adjusting fees isn't likely to make much difference. Here's why.
www.forbes.com
In 2021, Medicare increased reimbursement for cognitive (i.e. non-procedural) services while simultaneously reducing payment for procedural interventions (which, to be clear, often involve substantial cognition). For example, reimbursement for a high intensity return visit (HCPCS code 99215, in case you were wondering) increased from a little under $150 up to $180.
Based on past billing, these changes were predicted to reduce ophthalmology income by almost 3% while increasing family medicine income by approximately 11%.
So what happened to the gap in pay after these changes came into effect? Prior to the reimbursement changes, Medicare paid about $40,000 more per year to proceduralists than to non-proceduralists. Importantly, that $40,000 gap reflects only the difference in money each group receives from Medicare and does not count the payment gap from private insurers.
Based on past billing, experts predicted a 6% reduction in that gap. Instead, the gap remained essentially unchanged.
Why? Because physicians across all specialties altered their billing practices, claiming that a higher percentage of their visits were “high intensity” than they had claimed in previous years.
This change in Level 4 and 5 visits likely occurred because there is no universally objective way to determine when a patient’s appointment is high versus medium intensity. With no clear division between a Level 3 and a Level 4 visit, physicians who have seen their reimbursement decline may err towards reporting higher intensity visits. They are not lying about the appointments. They are grading them on a generous curve.
So what can HHS do? Ultimately, Medicare administrators need to decide how much money family medicine should make, compared to orthopedics, neurosurgery, etc. Then, they need to keep tweaking reimbursement until we get there. Along the way, expect physicians to scramble to maintain, or even increase, their incomes.
RFK Jr., Physicians’ Pay Schedules, and the Elites’ Big Lie
Learn about RFK Jr.'s bold agenda to combat corruption in the pharmaceutical industry.
cepr.net
Robert F. Kennedy Jr. is known first and foremost for his anti-vaccine crusades. However, he has also been saying some things that make sense.
More recently he indicated his intention to go after the pay schedules for physicians in Medicare. This is also a really big deal. The Medicare pay schedules for physicians are largely designed by the physicians themselves, with the specialists deciding how much Medicare should pay them.
The result is a system that tends to hugely overpay specialists, partly at the expense of primary care physicians and partly at the expense of the rest of us who must foot Medicare’s bill. The impact of Medicare’s physician payment structure is amplified by the fact that many private insurers follow Medicare in setting their own compensation levels for physicians’ services.
This is a big part of the story of why we pay our doctors so much more than doctors in other wealthy countries. The average doctor in the US gets paid over $365,000 a year. This is more than twice as much as their counterparts in other wealthy countries. If we paid our physicians as much as doctors in Germany or Canada, it would save us close to $200 billion a year.
