Medicare payment advisors unanimously approved a recommend Fiscal 2023 hospital payments were updated Thursday by 2%, and next year’s doctor bill payments are kept on hold.

But members of the Medicare Payments Advisory Committee continued to express concerns about the long-term viability of the current physician billing model, which they said could not keep pace with inflation during a time when health care providers are particularly volatile.

MedPAC annually assesses the adequacy of Medicare payments by sector. The committee examines factors such as access to care, access to capital and Medicare payments. To guide their draft recommendations for 2023, staff used data from 2020, colored by the COVID-19 public health emergency. But MedPAC believes that much of the impact of PHE on the health system is temporary and should not be addressed by updating the fee schedule.

The committee agreed that this should translate into updating hospital payments based on the amount established by current law, which is expected to be 2% in 2023.

However, Commissioner Brian DeBusk, CEO of medical device maker DeRoyal Industries, noted that 2023 will be the second year of extreme changes in hospital labor and material costs.The Centers for Medicare and Medicaid Services market basket, which reflects inflation faced by providers and is used to update hospitals’ payment systems, must reflect factors such as increased care costs, supply chain backup and more, he said.

“I expect hospitals and other authoritative sources to provide CMS with the information they need…I think these fundamental input costs have changed, and have changed dramatically, and it will become more apparent,” he said.

MedPAC also voted to recommend not increasing physician payments through the 2023 Physician Fee Schedule, also in line with the law, despite concerns that the proposal would lead to underpaid providers in the current high inflation environment.

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Provided for a 0% increase in physician salaries through a fee schedule, opting instead to offer the increase through a premium payment plan.

MedPAC staff report on adequacy of payments to physicians does not suggest 2023 departure from law is necessary, but MedPAC needs to consider a deeper, longer-term fix to the model, Commissioner, Weill Professor Lawrence Casalino, PhD, Cornell University Medicine Graduate School said.

According to DeBusk, 45 percent of a physician’s fee schedule is practice fees, or the resources involved in providing care in a medical practice. Hospitals may see very different updates than physicians because fee schedules do not have market basket updates that account for inflation like hospital payment systems do. That could prompt more doctors to look for work in hospitals, he said.

“It may or may not be a good thing for a hospital to hire a doctor. But if it happens, it should happen for a good reason, not because it’s driven by differential payment updates,” Casalino said, agreeing with DeBusk’s View.

Commissioner Lynn Barr, the head of Caravan Health, who guides providers through value-based care, emphasized that Congress should remain involved until a more permanent fix to the fee schedule is made.Congress passed a 3% increase Pay the provider’s doctor’s bill for the last month.

“I was a little worried about slapping people who were really on the front lines, but that’s what happened,” Barr said.

In fact, suppliers are already opposing MedPAC’s proposal.

“It’s hard to imagine more misleading advice…Physician practices are dealing with massive staffing shortages and skyrocketing costs. By ignoring this reality, MedPAC is essentially recommending that Congress do nothing to align Medicare payments with currency The expansion keeps pace,” Anders Gilberg, senior vice president of government affairs for the Healthcare Group Management Association, said in a statement.

Michael Chernew, chairman of MedPAC and a professor at Harvard Medical School, said the committee may discuss the broader issue of physician fee schedules in the future.

MedPAC also voted unanimously to recommend a 5% reduction in base payments for skilled nursing facilities, inpatient rehabilitation facilities and home health facilities. The committee further recommended increasing reimbursement for long-term care hospitals and keeping rates for hospice providers the same. MedPAC recommends updating the base payment for dialysis facilities to the amounts established by current law and removing the conversion factor for ambulatory surgery centers in 2022.

In addition, MedPAC recommends requiring home health agencies to report telehealth services provided within 30 days, requiring clinicians to track audio-only services through Medicare claims, and requiring ambulatory surgery centers to report cost data to help guide future payment updates.