Impending Medicare Pay Cuts Total Nearly 10%
By Joey Berlin

Use TMA's Toolkit on Medicare cuts to advocate for physicians and Medicare patients. 

Physicians in Medicare are about to get nickel-and-dimed – only it’s more like hundred-and-thousand-ed. And with a pandemic making this moment one of the worst times to financially hit physician practices still reeling from shutdowns last year, the Texas Medical Association, American Medical Association, and others are urging Congress to stop impending payment cuts that could devastate access to care for the nation’s elderly and disabled.

As of now, unless Congress acts to reverse several mandated Medicare payment cuts, those reductions will go into effect Jan. 1, 2022, with a collective hit of nearly 10% for Medicare-participating physicians.

The pending cuts 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;
  • 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.

“We’ve spent the last … 18 months in a very stressful public health emergency where, as a result of that, practices have had to dedicate greater resources to do what they do,” said San Antonio radiologist Zeke Silva, MD, a member of TMA’s Council on Legislation.

Physicians have had to shell out financial capital on more stringent infection protocols, personal protective equipment, and investments in telemedicine to account for an inability to see patients in a typical clinical setting, he says. Physicians who perform elective surgeries have dealt with repeated moratoriums on those procedures.

Three Medicare reductions totaling 9.75% would be another strain for physicians in a fee schedule that hasn’t kept up with inflation in the past two decades.

“It’s very difficult, [number] one, to sustain a practice in general – but you really want physicians to be motivated to take Medicare patients and to care for that population. Because this is a sizable percentage of our population … that’s really in need of the best health care possible,” said Dr. Silva, who also serves on the AMA/Specialty Society Relative Value Scale Update Committee, which advises Medicare on physician payments.

On top of the trio of cuts, physicians who participate in Medicare’s Quality Payment Program (QPP) may face even more payment pain, says Robert Bennett, TMA’s vice president of medical economics. QPP’s most common participation track, the Merit-Based Incentive Payment System (MIPS), can carry a payment penalty of as much as 9% for physicians who fall short in the program next year. (Those penalties would be assessed in 2024, as Medicare assesses incentives and penalties two years after a given MIPS performance year.)

Add that to the 2022 payment reductions, and suddenly some physicians could be looking at an 18.75% cut for the services they provide next year – continuing a trend that has consistently depressed physician payments in this millennium.

According to AMA research, when adjusted for inflation in practice costs, physician payments fell 22% from 2001 to 2020, an average of 1.3% per year.

All factors considered, organized medicine is impressing upon Congress the urgency to step in early. Mr. Bennett says medicine hopes those cuts don’t sit on the back burner while Congress wrangles with more complicated – and divisive – issues, such as spending and infrastructure bills.

“Stopping the Medicare cuts is traditionally a bipartisan issue that [lawmakers] can agree on. We hope they get that done now,” he said.

Last Updated On

November 08, 2021

Originally Published On

September 28, 2021

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