MGMA: Sustainable Financing Needed to Protect Rural Healthcare

October 09, 2023 - Physician and facility reimbursement for rural practices is not sustainable and is impacting patient access to rural healthcare, the Medical Group Management Association (MGMA) tells Congress in a new comment letter.  

A Congressional Request for Information (RFI) seeks to explore ways to improve access to healthcare in rural and underserved areas. But MGMA says that unsustainable financing is getting in the way of enhanced access to care for these populations as rural providers struggle to even keep their doors open.

“A fundamental bedrock needed to support medical groups’ ability to provide high-quality care to Medicare beneficiaries is a functioning and appropriate reimbursement system,” wrote the association representing more than 60,000 medical practice administrators, executives, and leaders, as well as over 15,000 group medical practices.

Operational costs for a medical practice have nearly doubled over the last two decades while Medicare physician reimbursement rates have grown just 9 percent, MGMA reported cutting data from the American Medical Association (AMA). More recently, 89 percent of medical groups responding to a July 2023 MGMA Stat poll reported higher operating costs.

While operating costs increase, physicians are essentially facing a decrease in revenue as inflation bogs down small increases to reimbursement rates. Still, physicians paid under the Medicare Physician Fee Schedule are slated to take a cut totaling 3.36 percent in 2024.

“This cut is untenable for practices and must be averted to ensure the financial viability of medical groups,” MGMA wrote.

Practices already told the association in a survey conducted last year that they would consider limiting the number of new Medicare patients, reducing charity care, reducing the number of clinical staff, and closing satellite locations.

MGMA urged Congress to avert the Medicare reimbursement cuts to support rural access to care. The association also suggested an annual inflation-based physician reimbursement update “to prevent further damage to rural medical groups’ ability to continue operating.”

An inflation-based update has been included in recent legislation called the Strengthening Medicare for Patients and Providers Act, which would tie physician reimbursement to the medical economic index (MEI).

MGMA also called for an extension of the exceptional performance bonus under the Merit-Based Incentive Payment System (MIPS), which expired at the end of 2022. The association said the bonus helps physician practices to comply with onerous MIPS requirements. Rural, small, and medically underserved practices have been disproportionately disadvantaged under MIPS, MGMA explained.

In addition to more sustainable financing, MGMA also highlighted changes to workforce management, prior authorizations, and value-based care implementation to support rural access to healthcare. The association called for:

• Graduate Medical Education Program funding support and more Medicare-supported medical residency positions
• Prior authorization reform, such as an updated version of the Improving Seniors’ Timely Access to Care Act, The GOLD CARD Act, and the Reducing Medically Unnecessary Delays in Care Act
• Positive financial incentives to support rural practices transitioning into value-based care, including an extension of the Alternative Payment Model (APM) incentive bonus at 5 percent
• Additional support to assist practices with the transition into APMs, including the ability for CMS to set the qualifying participant threshold at an appropriate level that does not discourage APM participation
• Development of more physician-led value-based care models specifically designed to succeed in rural and underserved communities