The U.S. House of Representatives’ Ways and Means Committee is working to extend the “rural” work Geographic Practice Cost Index (GPCI) payment adjustment, which is set to expire December 31, 2017. In order to pay for the extension, the committee has proposed an overall cut to Medicare physician payments by identifying and lowering payments for “misvalued” services. 

In 2014, Congress included a physician-opposed provision in the Protecting Access to Medicare Act (PAMA), designed to hold down Medicare spending by requiring the Centers for Medicare and Medicaid Services (CMS) to identify “misvalued” codes.

If CMS is unable to meet the savings target in the PAMA legislation, the remaining amount was to be obtained by an across-the-board payment cut to all services.

The Ways and Means Committee is now proposing a fourth year of Medicare physician payment cuts to fund the rural work GPCI floor, despite the commitments made under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) that physicians would be provided automatic, stable payment updates of 0.5 percent per year from 2015-2019. 

The California Medical Association (CMA) is urging the California Congressional Delegation to oppose the proposed cuts, which will disproportionately harm California physicians. The rural GPCI floor does not help California’s rural areas, while California physicians treat the bulk of Medicare patients in this country.

The misvalued code legislation has eroded the modest MACRA payment increases at the same time that physicians were required to make significant investments in their practices to meet MACRA reporting requirements. Physicians are also facing a payment freeze from 2019-2024. 

If this new proposal takes effect, total physician payment updates for the entire 10-year period of 2015-2024 will be approximately 1 percent.  From 2005-2015, physicians’ fees were essentially frozen under the Medicare Sustainable Growth Rate formula, while the costs to operate a medical practice rose more than 20 percent. These Congressional actions will represent more than two decades of nearly frozen payment rates, while all other Medicare provider groups have received updates. 

Physicians cannot remain in practice and maintain patients’ access to care under these flawed policies. This proposal harms all California physicians, particularly those in the Central Valley, where there are already significant physician shortages and margins to operate a practice are slim because the main payers are the low-paying Medicare and Medicaid programs. 

CMA is urging Congress to find other funding sources to fund the rural payment floor.