Members of Congress Urged to Reform Policies Requiring Budget Neutrality Within the Medicare Physician Fee Schedule

A coalition of professional medical societies, including ISASS, submitted a letter on October 31, 2023, to members of the US Congress thanking them for their efforts on reform policies requiring the Medicare Physician Fee Schedule to maintain budget neutrality for any changes to payments or policies under the Fee Schedule.

In effect, the policy of budget neutrality has caused CMS to offset any recommended increases in payments with decreases to other payments to maintain budget neutrality; this has resulted in a lower “conversion factor” being applied every year. The conversion factor is the multiplier used by Medicare to determine how much each Relative Value Unit (RVU) assigned for each physician service provided to a Medicare patient will be paid. A lower RVU year over year means lower payments year over year for physician services.

The proposed legislation would require Medicare to adjust the conversion factor annually even if it is not budget neutral and would allow Medicare to make retrospective adjustments to increase the pool of funds available for calculating conversion factors. The letter would also allow for adjustments to accommodate increases in practice costs every 5 years that would not be budget neutral.

ISASS supports all these proposed improvements and will work with other stakeholders to advocate for increases in Medicare physician payment.

To read the letter, see attached PDF here.