Congress to Halve Medicare Payment Cuts Via Year-End Spending Package

Lawmakers unveiled the $1.7 trillion year-end spending package early this morning, which is expected to avert a government shutdown by Friday if both chambers can pass the measure this week. The package would fund critical government operations, including HHS, for the 2023 fiscal year, as well as provide some reprieve from physician Medicare payment cuts.

In the spending package, Congressional leaders have met physicians halfway with Medicare payment cuts. Physicians are up against a 4.5 percent reduction to Medicare Physician Fee Schedule payments in 2023 and have pleaded with Congress to avoid the cuts altogether, considering the ongoing financial challenges providers are facing because of the pandemic.

The package seeks to stave off about half of the expected reductions to Medicare reimbursement for physician services over the next two years. Physicians will face a 2 percent cut in the new year and a 3.5 percent cut in 2024.

American Medical Association president Jack Resneck Jr, MD, expressed disappointment Congress did not go all the way with preventing the Medicare payment cuts and voiced concerns that the remaining cuts would threaten the financial viability of physician practices.

“This 2% cut following two decades of flat payment rates will have consequences on health care access for older Americans. High inflation compounds the threat to practice viability because physicians are the only Medicare providers without annual inflation-based updates. We are deeply worried that many practices will be forced to stop taking new Medicare patients – at a time when access to care is already inadequate,” Resneck stated.

The Surgical Care Coalition added, “Despite overwhelming bipartisan, bicameral support to stop the full Medicare physician payment cut, Congress failed once again to end the cycle of harmful Medicare cuts, showing a disregard for vulnerable seniors.”

“The draft omnibus legislation demonstrates a lack of commitment to our nation’s seniors and continues to put off a long-term solution. We urge Congress to change course, reflect the will of the nearly 270 Senators and Representatives who have urged leadership to take action to protect patient care and change the legislation before voting on it this week,” the Coalition’s statement continued.

CMS has implemented Physician Fee Schedule payment cuts over the years to offset the rising payments for other services, such as primary care. Physicians are also facing broad reductions from the government as a way to control federal spending.

Physicians have been able to successfully delay or soften proposed Medicare payment cuts in the past, arguing that reducing reimbursements would threaten access to care if practices do not get adequate funding to hire and pay staff. Last year, Congress prevented a nearly 10 percent cut to healthcare payments.

Without swift Congressional action on the year-end spending package, physicians in 2023 face a Medicare conversion factor decrease of $1.53 as CMS abides by budget neutrality rules and a pandemic-era 3 percent increase in rates expires. Physicians are also up against the end of a 5 percent value-based incentive payment for participating in Advanced Alternative Payment Models as part of MACRA.

The National Association of ACOs, which has asked Congress to extend the 5 percent bonus for value-based providers, said the year-end spending package would include a 3.5 percent incentive.

“While this is not the full 5 percent that providers have been receiving and NAACOS asked for, it does maintain some incentive to keep the momentum while Congress works on a long-term solution to encouraging adoption of alternative payment models. This should be considered a bridge toward greater reforms needed to encourage providers’ move into accountable care organizations,” NAACOS said in a statement on its website.

Other health policies included in the year-end spending package include two-year extensions of the hospital at home program and pandemic-era telehealth flexibilities.

If passed, it would also eliminate a requirement that providers get a special waiver before prescribing buprenorphine, a treatment for opioid addiction, and allow states to bump people off of Medicaid if they don’t meet eligibility requirements by April 1. Congress expanded Medicaid coverage as part of pandemic relief legislation. Around 15 million people are slated to lose Medicaid coverage when special provisions end with the COVID-19 public health emergency, reports the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE).