Over the years, sleep medicine physicians have seen continuous reductions in reimbursements, not only because of decreases in physician work due to advances in technology, but largely due to lower conversion factors, budget neutrality, and implementation of payment adjustment sequestration. Diverting the Medicare physician payment system away from its current and unsustainable path, and steering it instead toward physician practice sustainability, will protect patient access to high-quality, evidence-based care while easing administrative burdens.

The American Medical Association (AMA) and multiple state and national medical societies – including the American Academy of Sleep Medicine (AASM) – have outlined a practical, commonsense approach to reforming Medicare physician reimbursement based on the principles of simplicity, relevance, alignment and predictability.

Ensuring financial stability and predictability

The need for change is clear. Taking inflation in practice costs into account, Medicare physician payment has plunged 20% from 2001 to 2021. Medicare spending on physician services per enrollee decreased by 1% between 2010 and 2020, even as spending per enrollee for other parts of Medicare jumped by between 3.6% and 42.1%.

With inflation soaring to 40-year highs in 2022, statutory payment cuts looming in 2023, and many physician practices still dealing with pandemic-related financial issues, the current proposal from the Centers for Medicare and Medicaid Services (CMS) undermines the long-term sustainability of physician practices while threatening patient access to physicians participating in Medicare. This is all coupled with the discrepancies between several sleep-related local coverage determination policies and national policies. These discrepancies have AASM members in the Pacific Northwest Medicare jurisdiction being flagged during ongoing audits resulting in physicians facing penalties or spending a significant amount of time struggling through an appeal process to receive compensation for evidence-based care provided to Medicare patients.

Leading the charge to reform Medicare physician payment is a core element of the AMA’s Recovery Plan for America’s Physicians, along with advocating for changes to prior authorization, supporting the continued use of telehealth, reducing physician burnout, and stopping scope of practice creep.

Promoting value-based care

Physicians deserve payment models that recognize and invest in their provision of high-value patient care, while generating cost savings across all parts of Medicare and the broader health care system. In practical terms, this means directly rewarding the value of care that physicians offer to patients, as opposed to administrative tasks such as data entry that are often irrelevant to the service being provided.

Advancing value-based care also means encouraging innovation with practices and systems by emphasizing continuous improvement and boosting the overall quality of care provided to the full spectrum of patient populations, including higher-risk and higher-cost groups. Ideally, a variety of payment models and incentives tailored to the distinct needs of different specialties and practice settings should be in place, along with a financially viable fee-for-service model.

Safeguarding access to high-quality care

Given that the need to advance equity across all aspects of medicine has never been greater, payment model innovations should be risk-adjusted and reflect the ongoing contributions of physicians to the reduction of health disparities. Physicians who address social drivers of care need support as they provide care to historically marginalized, higher risk, and harder-to-reach patient populations. This support should extend to practices of all sizes and in all locations.

One of the biggest problems under the current payment system is the fact that other Medicare providers benefit from built-in updates, such as a medical economic index or an inflationary growth factor, that help offset increases in the cost of providing services – but no such offset exists for physicians.

Collaborating for change

Just as we didn’t get where we are overnight, we are unlikely to secure the massive, incredibly urgent overhaul of the Medicare physician payment system overnight. The good news is that we can get there through single-minded determination and the collective efforts of our association, our counterparts in the Federation of Medicine, and the AMA.

Working together, we can place the Medicare payment system back on a sustainable path and ensure that patients with sleep disorders receive the quality care they deserve.