Medicare Fee Schedule Proposal Remains “Highly Flawed,” Underscores Need for Reform
By Emma Freer

The proposed 2024 Medicare physician fee schedule came as no surprise, following earlier iterations that deepen physician pay cuts and increase complexities associated with the Merit-Based Incentive Payment System (MIPS) – prompting organized medicine to ramp up its call for reform that would break this cycle. 

In a lengthy Sept. 8 comment letter, the Texas Medical Association encouraged the Centers for Medicare & Medicaid Services (CMS) to update the “highly flawed” proposal – or risk further jeopardizing patients’ access to care and physician practice viability.  

TMA’s top priorities 

As in past years, TMA’s most pressing concerns are Medicare physician payment, which serves as a benchmark to other payers, and proposed changes to MIPS, which remains constantly in flux.  

The proposed rule would lower the conversion factor that determines Medicare physician payments by nearly 3.4% compared with the 2023 conversion factor. This cut largely stems from a much-maligned federal budget-neutrality provision that requires any physician pay increase or decrease to be offsetting, and piles on top of cuts enacted in 2023.  

TMA President Rick Snyder, MD, a cardiologist in Dallas, worries it will compound previous reductions and accelerate consolidation across the health care industry.  

“These cuts harm practices trying to stay viable and care for the most vulnerable patients – older adults and people with disabilities,” he wrote in the comment letter. 

Dr. Snyder also emphasizes the disparity between Medicare payments to physicians and those to other health care entities.  

“Between 2001 and 2023, Medicare physician payments decreased by 26% when adjusted for inflation, while Medicare payments to hospitals and other health care facilities generally have kept pace with inflation, according to the American Medical Association,” he wrote. “Over the same period, the consumer price index for physician services in U.S. cities increased by 65%.” 

For these reasons, TMA strongly supports the bipartisan Strengthening Medicare for Patients and Providers Act (House Resolution 2474) and recently met with lead bill sponsors to expedite passage of the legislation, which would provide annual inflationary updates to the Medicare physician fee schedule in line with the Medicare Economic Index (MEI), a measure of practice cost inflation.  

“We encourage CMS to work with Congress as they consider this bipartisan bill to reform this broken system and help ensure physicians are receiving inflationary updates, just like other Medicare providers receive,” Dr. Snyder wrote.  

TMA also endorses a set of AMA principles, the Characteristics of a Rational Medicare Physician Payment System, that call on Congress to establish financial stability for physician practices by eliminating budget-neutrality requirements, among other steps. 

“Financial stability is afforded through a baseline positive annual update that reflects inflation in practice costs,” Dr. Snyder wrote.  

In more positive news, the proposal heeds advocacy by TMA and others by postponing the implementation of updated MEI weights in light of an ongoing AMA study of physician practice expenses. 

Echoing TMA’s sentiments on this issue, AMA thanked CMS for this decision in its own Sept. 11 comment letter.  

“We are aligned with the necessity of basing MEI weights on reliable and contemporary data sources to ensure accuracy and fairness in rate-setting and urge the agency to continue to use AMA for this purpose,” AMA CEO James Madara, MD, wrote.  

Similarly, TMA continues to raise concerns about what Dr. Snyder described as “annual and incessant proposed changes” to MIPS, including increasing the minimum score – to 82 points from 75 points – necessary to avoid a financial penalty of up to 9%. 

Such updates add to physicians' administrative burden and contribute to burnout. 

“TMA pleads with the agency to alter MIPS requirements only as needed or when doing so significantly reduces the burdens physicians bear while navigating the MIPS program,” he wrote. 

Other proposed changes 

Despite these reservations, TMA supports several components of the proposal, including CMS’ plans to: 

  • Mitigate across-the-board cuts caused by a new evaluation and management add-on code for visit complexity due to the budget-neutrality provision; 
  • Adopt more than 90% of the AMA/Specialty Relative Value Scale Update Committee’s recommendations for new and revised Current Procedural Terminology codes; 
  • Pause and rescind Medicare’s beleaguered appropriate use criteria program for advanced diagnostic services;  
  • Postpone a confusing policy related to split (or shared) visits, which determines how physicians or nonphysician practitioners should bill for a shared visit; 
  • Include a nonmedical drivers of health risk assessment as an optional element of Medicare’s annual wellness visit, at no cost to the patient; and    
  • Delay mandatory adoption by Medicare Shared Savings Program participants of electronic clinical quality measures for all patients and all payers through the introduction of a new reporting option, Medicare clinical quality measures, to ease the transition.  

Gary Sheppard, MD, an internist in Houston and chair of TMA’s Council on Socioeconomics, recently told Texas Medicine Today he is hopeful these changes will free up physicians’ time for patient care.  

CMS is expected to release the final 2024 final Medicare physician fee schedule in early November.  

TMA equips you with the information you need to help stop the Medicare physician pay cut. Get involved in this crucial advocacy effort with ready-made social media graphics and posts, sample letters to the editor, a sample op-ed, and an Action Alert to send directly to legislators by downloading the toolkit

Last Updated On

September 28, 2023

Originally Published On

September 15, 2023

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Emma Freer

Associate Editor

(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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