Final 2024 Medicare Fee Schedule Solidifies Pay Cuts, Heightens Calls for Reform
By Emma Freer

Now that it’s been finalized, the 2024 Medicare physician fee schedule has solidified yet another pay cut, set for Jan. 1, 2024, underscoring calls for Medicare physician payment reform from physician advocates and lawmakers who’ve recently convened in federal hearings on the topic.  

The Texas Medical Association continues to fight the nearly 3.4% reduction, which will compound previous cuts, including a 2% cut that took effect earlier this year. Meanwhile, medicine welcomed certain other elements of the final rule. Most notably, the Centers for Medicare & Medicaid Services (CMS) heeded the association’s pleas to mitigate changes to the Merit-Based Incentive Payment System (MIPS).  

The 2024 fee schedule lowers the conversion factor that determines physician payments by 3.4% compared with the 2023 formula, continuing a decades-long trend with dire consequences, as TMA President Rick Snyder, MD, pointed out in a Sept. 8 letter commenting on CMS’ proposal.  

“These cuts harm practices trying to stay viable and care for the most vulnerable patients – older adults and people with disabilities,” he wrote on behalf of TMA.  

TMA has prioritized comprehensive Medicare physician payment reform, a fight that now hinges on legislative advocacy as members of Congress also increasingly seek policy change.  

TMA strongly supports the bipartisan Strengthening Medicare for Patients and Providers Act (House Resolution 2474) and recently met with lead bill sponsors to expedite its passage. The bill would provide annual inflation updates to the Medicare physician fee schedule in line with the Medicare Economic Index (MEI), a measure of practice cost inflation, and has been a topic of discussion at several recent congressional hearings.  

The U.S. House Energy and Commerce Committee’s Health Subcommittee recently convened a hearing on Medicare proposals to improve patients’ access to care and minimize physicians’ administrative burden, including HR 2474.  

Debra Patt, MD, an oncologist in Austin who testified during the Oct. 19 hearing, highlighted the stark inequities in Medicare payment to physicians versus other health care sectors: 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.  

Dr. Patt also urged committee members to pass legislation that will break this cycle and, with it, the “chain reaction” that stems from low physician payment.  

“Because reimbursement is low in the Medicare program, beneficiaries have difficulty finding primary care and specialty care clinics that will serve them,” she wrote in submitted testimony. “Given the disproportionate burden felt by non-hospital affiliated independent practices like mine, the disparity in reimbursement is fueling consolidating into hospital systems that are documented in driving up the cost of medical care for all Americans.” 

The Senate Finance Committee also took up the issue of Medicare physician payment reform during a Nov. 8 hearing.  

U.S. Rep. John Thune (R-South Dakota) called on committee leadership to prioritize Medicare physician payment and to consider incentives for practicing value-based care. 

“Instead of Congress making payment adjustments every year, it’s time we address the underlying issues and make long-term reforms of the physician fee schedule to ensure there is stability for physicians and the Medicare program in the future,” he said.  

Despite this momentum, HR 2474 and other legislation could become victims of the looming federal government shutdown, which will begin on Nov. 17 if Congress can’t come to a budget agreement.  

Robert Bennett, TMA’s vice president of medical economics, says a shutdown would eclipse other legislative business and add to the obstacles in HR 2474’s path to passage.  

Given these stakes, TMA President-Elect Ray Callas, MD, emphasizes the importance of sustained physician advocacy and encourages his peers to reach out to their representatives in support of HR 2474. 

“We have the influence to make a difference, but we have to take action,” he said during a Nov. 3 AMA webinar on the Medicare physician payment reform effort. 

In positive news, CMS yielded to TMA’s concerns about the agency’s proposal to  increase the  MIPS threshold to avoid a penalty, among other changing reporting requirements. 

CMS initially proposed to increase the minimum score – to 82 points from 75 points – necessary for MIPS participants to avoid a financial penalty of up to 9%. Per the final rule, the threshold will remain unchanged in the 2024 performance year, as will the weighting of the four performance categories, providing stability to participants.  

CMS also will: 

 

  • Extend payment parity for telehealth services at in-person rates through Dec. 31, 2024; 
  • Postpone the implementation of updated MEI weights considering an ongoing AMA study of physician practice expenses; and  
  • Implement a new office outpatient evaluation and management visit complexity add-on code. 

 

TMA equips member physicians with the information they need to help stop the looming 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

November 13, 2023

Originally Published On

November 10, 2023

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Emma Freer

Reporter

(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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