Congress Scraps Most of Medicare Cuts, Heeding Medicine’s Warnings
By Joey Berlin

The Texas Medical Association and many others in organized medicine bellowed through a collective bullhorn, urging Congress to pull Medicare physician payments back from the brink.

Last week, lawmakers heeded those calls with just a few weeks to spare.

On Dec. 7, the House of Representatives passed the Protecting Medicare and American Farmers from Sequester Cuts Act, which eliminated almost the entirety of three cuts that would have sliced physician payments by 9.75% in 2022. Two days later, the Senate did the same by a 59-35 vote, sending the bill to President Joe Biden’s desk. President Biden signed the bill into law the next day, Dec. 10.

Throughout the fall, TMA and the American Medical Association mobilized physicians to impress upon lawmakers the potential impact of such a deep payment reduction. A TMA survey of nearly 1,400 members showed that if faced with the cuts, 62% of Texas physicians might be forced to stop seeing new Medicare patients. Nearly 60% said they would consider opting out of Medicare entirely, and 43% said they might consider retirement.

As it has done in previous years with other Medicare legislation, Congress could have retroactively addressed the cuts in early 2022. But in acting before the new year, lawmakers prevented physician practices from facing serious challenges, San Antonio radiologist Zeke Silva, MD, told Texas Medicine Thursday afternoon, just before the Senate took up the bill. Dr. Silva is a member of TMA’s Council on Legislation and chair of the AMA/Specialty Society Relative Value Scale Update Committee, which advises Medicare on physician payments.

He says when Medicare-related legislation occurs after the new year, physicians often face payment delays while Medicare updates its systems – a process that can take several weeks.

“[That] creates a problem for practices because it can potentially decrease revenue during that time.  … Some practices [would] have to tap into lines of credit and the like to meet payroll,” Dr. Silva said. He noted most practices distribute all their revenue before the end of the year for tax purposes, and the first quarter typically is a lean time.

The three cuts that Congress has almost entirely staved off for now include:

  • A 3.75% reduction to the 2022 Medicare physician fee schedule conversion factor, a multiplier that’s part of the calculations for payment rates for a particular service. The bill passed last week substitutes a 3% increase to the conversion factor to replace the previous 3.75%, leaving an overall .75% cut;
  • A 2% across-the-board cut known as sequestration, which Congress has delayed several times before and during the pandemic; and
  • An additional 4% sequestration cut resulting from the American Rescue Plan Act, because that COVID-19 relief law’s price tag also surpassed a threshold in federal law meant to rein in deficit spending. 

Under the bill, the 2% sequestration cut would be eliminated until the beginning of April 2022, when a 1% cut would take effect for three months. The oft-delayed 2% cut would then take effect in July 2022 unless Congress defers it once again.

TMA President E. Linda Villarreal, MD, praised Congress for taking action but added, “Physicians will still face a slight cut in 2022, with no permanent solution to avoid future cuts. 

“What’s really needed is a more meaningful, permanent policy for how Medicare pays physicians, so Congress doesn’t have to revisit this issue,” she said, and TMA will continue to work in the coming year “to effect a substantial, permanent, and predictable solution to this recurring problem.”

Last Updated On

March 08, 2022

Originally Published On

December 10, 2021

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