Congress Mitigates 2024 Medicare Physician Pay Cut
By Emma Freer

Congress recently passed legislation halving the 3.4% Medicare physician pay cut that took effect on Jan. 1, 2024, following a months-long, high-pressure advocacy campaign by the Texas Medical Association, the American Medical Association, and others in organized medicine. But TMA and its allies continue to push for additional reform given that any cut threatens physicians’ practice viability and vulnerable patients’ access to care.

“Every time we ask for a Band-Aid, we still get a scratch,” TMA President-Elect Ray Callas, MD, recently told Texas Medicine Today

President Joe Biden signed into law on March 9 a $460 billion spending package, averting a shutdown of some federal government agencies. The package included a provision reducing the Medicare physician pay cut to 1.68%, now in effect.  

However, physicians already have shouldered the burden of the higher 2024 cut for more than two months, risking practice closure, early retirement, and reductions in health care services, office hours, and Medicare patient panels, as TMA and others have repeatedly warned lawmakers.  

For example, Haskell family physician C. Wayne Cadenhead, MD, closed his office doors for the last time in late December 2023, unable to withstand yet another Medicare physician pay cut. 

“I’ve had enough,” he told Texas Medicine Today in his practice’s final days.  

These consequences are likely to continue under the new law, with Medicare physician payments still falling short of rising practice costs.  

The cut, enacted via the 2024 Medicare physician fee schedule, stems from a much-maligned federal budget-neutrality provision that requires any physician pay increase or decrease to be offsetting, as well as from Congressional inaction on Medicare payment policy, both of which further erode Medicare physician payment. 

Between 2001 and 2023, such pay decreased by 30% when adjusted for inflation, even as Medicare payments to other sectors generally kept pace, according to AMA. Over the same period, the consumer price index for physicians’ services in U.S. cities increased 65%. 

TMA, AMA, and others remain focused on reforming Medicare physician payment policy to prevent similar cuts in the future.  

“TMA will not let up in its efforts to protect Texas patients and physicians from these ongoing, harmful cuts,” TMA President Rick Snyder, MD, said in a Jan. 19 statement. “Congress must act now to resolve this decades-old problem.” 

In pursuit of a long-term fix, TMA supports the bipartisan Strengthening Medicare for Patients and Providers Act (House Resolution 2474) by U.S. Rep. Raul Ruiz, MD (D-Calif.), which would provide annual inflationary updates to the Medicare physician fee schedule in line with the Medicare Economic Index, a measure of practice cost inflation, among other reforms.  

For more information, check out the revised 2024 Medicare physician fee schedule

TMA equips you with the information you need to stop the latest Medicare physician pay cut. Get involved in this crucial advocacy effort by downloading the toolkit.

Last Updated On

March 21, 2024

Originally Published On

March 12, 2024

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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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