Medicare's physician pay system is 'unsustainable,' trustees say

The current physician payment system is potentially unsustainable in the long term, according to a June report from Medicare trustees to House Speaker Nancy Pelosi and Vice President Kamala Harris. 

The report said the Medicare Access and CHIP Reauthorization Act, a payment system for Medicare physician fees that replaced the sustainable growth rate formula in 2016, "raises important long-range concerns that will almost certainly need to be addressed by future legislation." 

The report from the boards of trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance trust funds laid out why the payment system could be unsustainable. 

Three things to know:

1. Most physicians will face Medicare pay cuts starting in 2025 due to the expiration of the $500 million exceptional performance bonus in the Merit-based Incentive Payment System and 5 percent incentive payment for qualifying Alternative Payment Model participants. The result, the report said, is a payment reduction for most physicians 

2. By 2048, the trustees estimate, physician payment rates under MACRA will be lower than they would have been under the sustainable growth formula — about 30 percent lower by end of the period projected.

3. Unless there is a change in the delivery system or level of update by subsequent legislation, the report says, the trustees expect compensation to Medicare-participating physicians to become a "significant issue in the long term."

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