New HMA white paper examines Medicare's reimbursement system for physicians' services

Researchers explore its history, reasons behind calls for reform, and provide recommendations for improvements

LANSING, Mich., May 7, 2024 /PRNewswire/ -- Today, Health Management Associates (HMA) released a new white paper, "Medicare Physician Fee Schedule Reform: Structural Topics and Recommendations to Strengthen the System for the Future." It provides an in-depth analysis of the Medicare Physician Fee Schedule, including the history of its implementation, stakeholder perspectives on reform, major structural issues, and recommendations for improving the $90-plus billion payment system.

Recent years have witnessed a growing bipartisan call to reform how Medicare reimburses for physician and other health professional services. A wide array of stakeholders assert that the current system—the Medicare Physician Fee Schedule (PFS)—is misaligned with today's practice patterns and market dynamics. Many constituencies maintain that the PFS is insufficiently updated, embeds known pricing distortions, and does not appropriately effectuate value-based care principles. Although a considerable number of legislative and regulatory changes have been implemented to refine and modernize the system, the PFS has never been subject to a major statutory overhaul that would comprehensively address pressing issues. 

HMA studied these issues with support from Arnold Ventures in "Medicare Physician Fee Schedule Reform: Structural Topics and Recommendations to Strengthen the System for the Future." HMA's white paper is an accessible primer on the PFS and key moments that led to the current policy situation. The white paper describes structural topics in the PFS that raise concern or prompt calls for change, provides context on the history and progress of the payment system and highlights stakeholder perspectives on reform.

Authors also include a series of recommendations that the Centers for Medicare and Medicaid Services could implement without Congressional action to help improve payment accuracy, further the adoption of alternative payment models and help strengthen the system for the future. The recommendations highlight areas that prioritize actionable steps, prompt idea generation, and encourage process improvement within the PFS.

For accessible background and context on the PFS and why the stakeholder community is calling for reforms to the fee schedule, download here.

View an electronic timeline of key policy developments and highlights of topics related to the PFS since implementation in 1992 here.

About HMA
Founded in 1985, HMA is an independent, national research and consulting firm specializing in healthcare and human services policy, programs, financing, and evaluation. Clients include government, public and private providers, health systems, health plans, community-based organizations, institutional investors, foundations, and associations. Leavitt Partners, an HMA Company has been at the forefront of navigating change in healthcare for over a decade and works at the intersection of government and health care, helping clients stay one step ahead of the influences impacting the industry, including economic, market, delivery system, public policy, and political developments. HMA has offices in more than 30 locations across the country and over 700 multidisciplinary consultants coast to coast. Learn more about HMA at healthmanagement.com, or on LinkedIn and X.

About Arnold Ventures
Arnold Ventures is a philanthropy dedicated to tackling some of the most pressing problems in the United States. It is a team of more than 120 subject-matter experts headquartered in Houston with offices in New York and Washington, D.C. It works in five key issue areas: Criminal Justice, Education, Health, Infrastructure, and Public Finance. Its work is guided by evidence-based policy, research, and advocacy.

SOURCE Health Management Associates