Bad news for proponents of fixing CMS' physician pay cut

Many healthcare providers were hopeful that Congress would reconsider its proposed Medicare reimbursement rates for 2024; however, recent updates by the agency have dashed the hopes of some clinicians.

In November, CMS released its physician fee schedule final rule for 2024, which updated the conversion factor to $32.74 — a 3.4% decrease that equates to an overall physician pay cut of 1.25%. Further, some physicians may face additional pay cuts related to the cost-performance category of the merit-based incentive payment system, which has the potential to lower Medicare payments by up to 9%.  

When adjusted for inflation of practice costs, Medicare pays physicians 26% less than it did in 2001, the AMA said in a July report — and the final rule widened that gap.

Approximately 200 members of Congress co-signed a bipartisan letter urging House and Senate leaders to pass legislation to ease the proposed cuts. Members also sponsored legislation that would permanently tie Medicare reimbursements to the Medicare Economic Index in the future.

"The effects of these cuts will be exacerbated in rural and underserved areas, which continue to face significant healthcare access challenges. Medicare physicians and other providers do not receive inflationary updates in the Medicare program, which is partially why eliminating these potential cuts is so crucial. We as policymakers must ensure that physicians and other providers who treat Medicare patients continue to have the necessary financial support to care for our nation's seniors," the Congress members wrote

CMS released a $460 billion spending package in March that halved the 3.4% Medicare pay cut to 1.7% — however, that move is only temporary. The reduction will only be in effect until Jan. 1, 2025, and will not apply retroactively. 

"While we appreciate the challenges Congress confronted when drafting the current 2024 appropriations package, we are extremely disappointed that about half of the 2024 Medicare physician payment cuts will be allowed to continue," AMA President Jesse Ehrenfeld, MD, said in a March 6 statement. 

According to the AMA, if physicians got an inflationary adjustment similar to that of hospitals and other health professionals, they would have seen a 4.6% increase in payment in 2024.

"Because of Congress' failure to reverse these cuts, millions of seniors, like my parents, will find it more difficult to access high-quality care and physicians will find it more difficult to accept new Medicare patients," Dr. Ehrenfeld said. "In the coming months, Congress must turn its attention to Medicare reform."

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