APG Letter to Ways and Means Committee on Potential Medicare Cuts

November 30, 2021

The Honorable Richard Neal
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, DC 20515


Dear Chairman Neal:

America’s Physician Groups (APG) would like to thank you for your continued efforts in working to best serve the nation and its healthcare system. As an association that represents hundreds of healthcare organizations that are engaged in serving patients through the Medicare program, we recognize the important work that you do in supporting these models and the providers who work within them.

It is in that spirit that we write to you to communicate the importance of preventing potential cuts to the Medicare program that would have devastating effects on patients and providers alike.

About America’s Physician Groups
APG is a national professional association representing over 340 physician groups that employ or contract with approximately 195,000 physicians providing care for nearly 45 million patients as well as over 25% of the Nation’s Medicare Advantage beneficiaries. Just as you do, we have deep Californian roots, starting as the California Association of Physician Organizations (CAPO) in 2002, transitioning to the California Association of Physician Groups (CAPG) , then expanding to become APG in 2018. No matter our name, APG has always been the leading association representing accountable, coordinated physician groups. Our tagline, “Taking Responsibility for America’s Health,” represents our members’ vision to move away from the antiquated fee-for-service (FFS) reimbursement system where clinicians are paid “per click” for each service rendered rather than on the outcomes of the care provided. Our preferred model of accountable, risk based, and coordinated care avoids incentives for the high utilization associated with FFS reimbursement. APG is strongly committed to Medicare Advantage and comprehensive, affordable, and efficient care it provides for seniors.

Firstly, we would like to take the time to reiterate the need to support providers participating in Medicare Advantage (MA) particularly as it pertains to those who engage in high-value MA risk contracts. MA is instrumental to the transformation of our nation’s health care system from volume to value. We know that MA provides better quality care for seniors and our members’ value-based payment arrangements in MA create incentives for: (1) a team-based approach that emphasizes primary care; (2) physician organizations to provide the right care at the right time in the most appropriate setting; and (3) a care team that addresses the patient’s total care needs, including mental health, behavioral health, and home environment. It is important that the viability of risk-based models be supported in both the short and long term, and we recognize and preserve the role they play in moving healthcare from volume to value.

We would also restate that lowering the costs of care for patients through drug pricing reform and encouraging movement to lower cost care settings such as home or ambulatory care is a key piece of the value-based care movement. Congress has made great strides in the former through the passage of Build Back Better and we thank you for your efforts. In terms of the latter, technology has progressed to the point where virtual visits offer even more convenience for patients while still allowing providers to effectively treat those suffering from chronic conditions while monitoring their health and creating effective care plans for treatment. The advantages that telehealth services represent for those patients with issues surrounding access to care, individuals with disabilities, and the elderly have been evident during the ongoing pandemic. Parity and permanent for reimbursement of telehealth services for services in the home and outside the designated rural areas, along with risk adjustment eligibility for diagnoses from MA beneficiaries that are obtained from audio-only telehealth services, would go a long way toward ensuring that costs for patients nationwide continue down the path of being decreased.

As Congress moves toward crafting legislation to close out the year, we ask that you consider the negative impact that any cuts to these programs could have on beneficiaries who have already navigated so much over the past two years. Providers are facing a potential ten percent cut to Medicare reimbursement if Congress does not pass legislation to avert this drastic change in how much physicians are paid. Statutory Pay-As-You-Go (PAYGO) is still in effect and will trigger deductions to a host of federal programs, including Medicare. Congressional action is needed to prevent PAYGO from reaching deductions to Medicare payments of up to four percent beginning on January 1, 2022. Such a drastic cut to physician reimbursement would have a severely detrimental impact on the ability of physicians to administer care to Medicare beneficiaries in a time where the impact of the COVID-19 public health emergency is still being felt across the  healthcare system. Implementing such a cut would undermine much of the work that Congress and the Biden Administration has done in recovering from the effect that COVID-19 has had on the nation, including measures such as the Physician Relief Fund and other provisions in the CARES Act.

Likewise, the long-delayed two percent Medicare sequestration cuts are set to take effect in January 2022 after numerous Congressional delays. This moratorium must be extended, particularly in light of the potential PAYGO cuts that providers are facing simultaneously. The prospect that a combined PAYGO cut, and sequestration cut could hit providers at the same time would devastate the healthcare system after an already tumultuous two years when many organizations have yet to fully recover from the pandemic.

The Centers for Medicare & Medicaid Services (CMS) also included a 3.75 percent cut to the conversion factor as monies that Congress appropriated into the Physician Fee Schedule (PFS) in the Consolidated Appropriations Act of 2021 expired. Congress added $3 billion to the PFS for 2021 to mitigate the decreases many services were facing resulting from the increases to the relative value units (RVUs) for the outpatient evaluation and management services, mitigating 2021 cuts due to the continued challenges faced by providers because of the ongoing COVID-19 public health emergency. As the pandemic continues, Congress must add prevent the 3.75 percent cut from going into effect.

As providers and their organizations still work to recover from the impact of the still ongoing COVID-19 pandemic, it is critical that Congress not add on any further uncertainty or negative effects that could hamper providers’ ability to serve patients during this trying period while remain viable providers of care for those who need it most. We urge Congress to avoid these potential cuts in any legislation it passes over the coming months.

Thank you for your attention to the above comments. We look forward to meeting with you soon and continuing to work with you in the future. Please feel free to contact Valinda Rutledge, Executive Vice President, Federal Affairs, (vrutledge@apg.org) with the best available times to connect, if you have any questions, or if America’s Physician Groups can provide any assistance as you consider these issues.


Donald H. Crane
President and CEO
America’s Physician Groups


Click here to download a copy of the letter.