Health Policy News: House Discusses Ways to Reform Medicare Physician Reimbursement

House Discusses Ways to Reform Medicare Physician Reimbursement

A House Energy & Commerce Subcommittee on Health hearing last week examined how the current Medicare physician payment system is contributing to instability across the healthcare system. Three out of the five witnesses who appeared were primary care and family medicine physicians, including Drs. William Fox (American College of Physicians), Stevn Furr (American Academy of Family Physicians), and Farzad Mostashari (Aledade).

During the hearing, there was bipartisan concern over repeated Medicare physician payment cuts, as well as the Medicare Physician Fee Schedule’s budget-neutrality requirement, which often pits medical specialties against one another. One of the major concerns was that physician reimbursement has not kept up with inflation while staffing, equipment, rent, and compliance costs have risen, leaving many doctors unable to sustain independent practices. Witnesses said this is accelerating consolidation into hospitals and large systems, which often charge Medicare and patients far more for the same service.

Primary care was a major focus, with testimony that the current system undervalues primary care despite its value in managing chronic disease, coordinating specialist care, and preventing more expensive complications. Witnesses warned that low reimbursement and administrative burden are discouraging medical students from entering primary care and worsening shortages, especially in rural areas.

The hearing also highlighted how the Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) have added reporting burden without meaningful improvement in care, with quality measures that often do not reflect specialty-specific practice, and payment structures that reward episodic services more than longitudinal care.

Witnesses broadly supported reforms such as tying physician payment updates to inflation through the Medicare Economic Index (MEI), reforming budget neutrality rules, strengthening site-neutral payments, improving advanced primary care management payments, and extending and redesigning bonuses for APMs. SGIM submitted a statement for the record for this hearing.

WISeR Faces Growing Scrutiny

Last year, the Centers for Medicare & Medicaid Services (CMS) launched a pilot program, called WISeR (Wasteful and Inappropriate Service Reduction), in six states to use enhanced technologies such as artificial intelligence (AI) to approve or deny select prior authorization requests in traditional Medicare. Critics have sounded the alarm about this model, arguing that it delays medically necessary care, creates new administrative burdens, and financially incentivizes denials. Following a request from the Senate Democrats, the Government Accountability Office (GAO) released a determination that the WISeR model is subject to the Congressional Review Act. The determination starts a 60-day period during which Democrats can force a vote on the resolution of disapproval to repeal the model.