AMA Discusses Medicare Sustainability, Prior Authorization, AI at Annual Meeting

June 13, 2024

Nine physicians represented the MMA at the AMA annual meeting of the House of Delegates (“House”) earlier this week, discussing a range of issues from prior authorization to Medicare sustainability.  

MMA member representatives included: Cindy Firkins Smith, MD, delegation chair; J.P Abenstein, MD; Andrea Hillerud, MD; Lisa Mattson, MD; George Morris, MD; Dennis O’Hare, MD; Ashok Patel, MD; David Thorson, MD; and MMA President Laurel Ries, MD.   

MMA's AMA delegation: David Thorson, MD (left); Cindy Firkins Smith, MD; Dennis O'Hare, MD; Andrea Hillerud, MD; Laurel Ries, MD; Lisa Mattson, MD; George Morris, MD; Ashok Patel, MD; and J.P. Abenstein, MD.

The Minnesota delegation works collaboratively with delegates from the North Central Medical Conference (NCMC), which includes Iowa, Nebraska, North and South Dakota, to address issues important to Minnesota physicians and patients. The NCMC is known for its expertise surrounding, and commitment to, rural health and underrepresented patients.  

Medicare Payment Reform 

A top priority for the AMA is reforming the Medicare payment system to ensure fair and sustainable payments to physicians. The current payment system has resulted in physician payments dropping 29% since 2001, after adjusting for inflation. These unsustainable payment rates do not reflect practice costs, or the value of the care provided, according to an AMA Council on Medical Service report adopted at the meeting. 

The current system also benefits larger systems. While current healthcare industry trends lean toward larger physician practices, more than half of physicians still work in practices with 10 or fewer physicians. The report also focused on Medicaid payments, stressing that the viability of these small physician practices—as well as those serving patients in rural, economically marginalized or underserved areas—may be at risk because Medicaid pays them even less than Medicare does. 

The report adds that, as Medicare physician payment rates continue to either drop or fail to keep up with the rate of inflation, linking private insurance payment rates to the Medicare physician payment schedule puts small practices at a further disadvantage. 

Prior Authorization 

Prior authorization is an issue that is impacting physician practices across the country. According to an AMA Council on Medical Service report that was adopted at the Annual Meeting, of particular concern is the lack of information included in denial letters. 

Information needed to understand or appeal the denial itself is not included for physicians and patients. For example, patients and physicians may simply be informed that a medication has not been granted prior authorization. Beyond that, no justification as to why the denial took place or an alternative treatment option is provided. 

Artificial/Augmented Intelligence 

The AMA meeting focused a lot of discussion on Artificial/Augmented Intelligence (AI) and its role in patient care.  While there are many good uses of AI to improve patient care, it can, and is also being used by insurers and others to, deny care based on algorithms that do not consider the individual needs of a patient. 

To address this growing issue, the AMA will establish a task force focused on digital health, technology, informatics, and AI.  The approved policy calls for that task force to transition to a new formal council to address these issues.  

Private Equity 

As the business side of medicine continues to grow, there is a growing concern about over-consolidation and the influence of private equity firms purchasing clinics. The House heard a report from the Council on Ethical and Judicial Affairs (CEJA) restating that physicians have a fundamental ethical obligation to put the welfare of patients ahead of personal financial interests. This includes seeking capital for their practice from investment firms.  

Because of the pressures on clinics to consolidate, many clinics believe partnering with an investment firm is a better alternative to selling to a large hospital system or a health plan. Because of this complexity, the House asked CEJA to continue to study these issues and report back at the next AMA meeting in November. 

Rural ER Staffing 

To address the concerns raised with non-physicians being the only staff in an emergency room (ER), there was a push by the emergency physicians to require all emergency rooms to be staffed by board-certified emergency physicians. This is an issue that the Minnesota delegation opposed because of the strain it would put on rural ERs. The final action adopted requires that the ERs be staffed 24/7 by qualified physicians. The ruling did not define “qualified physician,” nor did it state how that staffing would be achieved. The AMA is scheduled to release a formal report on the issue at its interim meeting in November.  

For a summary of highlights from the 2024 AMA Annual Meeting, click here.