AHA Letter to Senate Finance Committee on Medicare Part B White Paper

AHA Letter to Senate Finance Committee on Medicare Part B White Paper

AHA’s nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) writes to you to provide comment on the Senate Finance Committee white paper on Bolstering Chronic Care through Physician Payment, Current Challenges and Policy Options in Medicare Part B. The latest Medicare Trustee’s Report indicates that physician reimbursement has dropped over 20% over the last 20 years when accounting for inflation. In addition, there is a widening gap between the conversion factor updates and Medicare Economic Index (a proxy measure for physician cost inflation).

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Portions of the bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) were intended to fix some of the legacy issues with the historical sustainable growth rate (SGR), namely by replacing updates to the conversion factor which were tied to gross domestic product with updates that more accurately covered rising health care input costs through the Medicare Economic Index (MEI). However, inflation (as measured by the MEI) is growing faster than increases in PFS rates.From 2015-2019, MACRA provided a 0.5% increase in the conversion factor. However, starting in 2020 through 2025 there was a gap where MACRA programmed a 0% update to the conversion factor. 


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