The Medicare Payment Advisory Commission’s (MedPAC’s) most recent report to Congress recommends that Medicare increase physician pay in traditional Medicare. Its recommendation came in the context of recognizing good access to care for people in traditional Medicare–as good as or better than people who are privately insured–but inflationary pressures on physician practices. MedPAC does not address the rates Medicare Advantage plans–corporate health plans offering Medicare benefits–pay physicians.
MedPAC recommends that traditional Medicare increase physician pay by 1.45 percent. It also recommends an increase in pay of 15 percent to primary care physicians who serve dual-eligibles–people with both Medicare and Medicaid. And, MedPAC recommends a 5 percent increase in pay for other physicians serving people in traditional Medicare with low incomes.
Not surprisingly, the American Medical Association supports these recommendations and wants them to be even higher. The AMA argues that physician pay in traditional Medicare has not gone up at the same rate as the cost of practicing medicine. AMA says with inflation adjustment, physician pay in Medicare has dropped 26 percent in the last 22 years. Physicians in small practices, in rural communities, and serving low-income populations are most hurt.
In addition, MedPAC recommends moving more Medicare support to safety-net hospitals. And, MedPAC believes that Medicare should not be paying different amounts for the same service depending upon where the service is provided.
Medicare Advantage plans can set their own physician rates; they also can piggyback off of traditional Medicare rates. Given access to care issues in Medicare Advantage plans, particularly access to high quality specialists, it would be helpful to know whether Medicare Advantage plans are paying in-network specialists at the same rate as traditional Medicare today or at a lower rate. To ensure access to care in Medicare Advantage, while delivering cost-effective care, Medicare Advantage plans should be paying the Medicare rate for specialty care.
Six years ago, Medicare Advantage plans paid physicians somewhat less than traditional Medicare. In 2017, “MA paid 96.9% of what traditional Medicare paid for a mid-level office visit, 91.3% of what traditional Medicare paid for a cataract removal in an ambulatory surgery center and 102.3% of what traditional Medicare paid for a complex evaluation and management of a patient in the emergency department. Laboratory services and durable medical equipment saw much lower MA rates, including only 67.4% for a walker and 75.8% for a complete blood cell count.” It’s not clear whether Medicare Advantage provider rates have come down further since then. People in Medicare Advantage plans should be concerned about their ability to access good quality providers if they have come down further.
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