We surveyed more than 100 healthcare organizations to better understand how they are continuing to adapt to Medicare Physician Fee Schedule (MPFS) changes specific to physician and APP compensation arrangements.
As a follow-up to a January 2022 rapid survey assessment, ECG has conducted a second annual survey of more than 100 healthcare organizations to better understand how they are continuing to adapt to Medicare Physician Fee Schedule (MPFS) changes specific to physician and APP compensation arrangements.
MPFS Adoption
In 2022, almost a quarter of organizations had transitioned to the most recent MPFS, but that number is expected to increase to 37% in 2023. Of the organizations that have not transitioned to the most recent MPFS, approximately one-third are still using the 2020 MPFS, while the remaining 29% are on either the 2021 or 2022 MPFS.
Survey responses show that most organizations that delayed transition from the 2020 MPFS were waiting for more reliable market data. As market data comes more in line with the most recent MPFS, organizations are accordingly transitioning away from the 2020 MPFS.
By 2024, it is anticipated that half of all organizations will be on the then-current MPFS; however, it is important to note that nearly 60% of organizations still using the 2020 MPFS in their compensation plans are undecided about when they will transition to the most recent schedule.
MPFS Adoption and Survey Challenges
Of surveyed organizations, 30% cited challenges transitioning to a new MPFS, including:
- Provider dissatisfaction.
- Concerns around financial affordability through increased provider compensation.
- Market data ambiguity.
In response to varying survey data, 50% of organizations did not adopt 2022 published benchmarks; organizations instead chose to adjust compensation rates, incorporate multiyear blends of survey data, and/or cap year-over-year compensation changes.
Future Considerations
This year’s survey validated that organizations continue to have questions regarding the impact of both continued MPFS changes and inflation-related challenges to compensation, and concerns about the published survey benchmarks and their applicability. As more and more organizations transition to the most recent MPFS, the survey data should also become more reliable, though this may take additional years to fully stabilize as MPFS changes continue to be rolled out year over year (e.g., the updated WRVU values for inpatient E&M codes in 2023, the delayed update to the split-share rule until 2024).
While there is no immediate risk to maintaining the 2020 MPFS for compensation purposes, it is important to note that organizations will continue to become further removed from market norms and published survey data over time. While the significant inpatient MPFS changes in the 2023 MPFS data may slow some organizations’ transition to the most recent MPFS, it is expected that the majority of organizations with production compensation models will transition to the most current MPFS over the next two years.