Providers Leaving No Stone Unturned to Stop Medicare Payment Cuts

Healthcare industry groups representing over 1 million physicians and other clinicians have joined together to urge Congress to prevent a 4.5 percent Medicare payment cut starting Jan. 1, 2023.

“This desperately needed relief will help provide crucial short-term financial stability for practices until permanent, bipartisan payment reforms are enacted,” says a letter organized by the American Medical Association (AMA) and signed by all 50 state medical associations. The letter was sent to House leaders Nancy Pelosi and Kevin McCarthy, as well as Senate leaders Chuck Schumer and Mitch McConnell. A separate letter was also organized by the AMA and signed by more than 100 national specialty societies and others, such as the Ambulatory Surgery Center Association and The US Oncology Network.

Through the letters, the industry groups hope congressional leaders address the steep Medicare payment cuts during the “lame duck” session and prevent the entirety of the cuts from taking place as part of an end-of-the-year legislative spending package.

The Medicare payment cuts stem from the expiration of the 3 percent Medicare Physician Fee Schedule increase that Congress enacted through the Protecting Medicare and American Farmers from Sequester Cuts Act. Providers are also up against a new 1.5 percent budget-neutrality reduction related to payment changes CMS finalized for evaluation and management (E/M) services in the non-office setting, AMA explains.

“The impending 4.5 [percent] Medicare Physician Fee Schedule (MPFS) payment cut comes as medical practices throughout the country are experiencing pressures stemming from rising rates of inflation,” states the letter from the AMA and the state medical associations. “All [healthcare] stakeholders struggle to endure steep, annual payment reductions; however, the negative impact of such policy decisions is exacerbated by the fact that physicians are the only providers whose Medicare payments do not automatically receive an annual inflationary update.”

The groups say that this “statutory flaw” of the MPFS consistently results in financial uncertainty and fiscal challenges for all physicians.

“The stark reality is that, adjusted for inflation in practice costs, Medicare physician pay has declined 22 [percent] from 2001 to 2021 (JPG). Allowing cuts to Medicare payments is simply unacceptable during this time of record inflation and coming on the heels of a highly disruptive pandemic,” continues the letter.

Healthcare is already at a crossroads as providers report high levels of burnout, stress, workload, and the cumulative impact of COVID-19, according to AMA. The industry group says that one in five physicians is considering leaving their current practice within two years as a result of these stressors.

“Payment cuts will only accelerate this unsustainable trend and undoubtedly lead to Medicare patients struggling to access [healthcare] services,” the letter states.

A group of Senators has sounded the alarm on Medicare payment cuts for their colleagues. A letter circulated in early November and led by Michigan Democratic Senator Debbie Stabenow and Wyoming Republican Senator John Barrasso urged Congress to address the looming Medicare payment cuts to ensure continued patient access to care.

“Failure to act in the coming weeks could result in reduced staffing levels and office closures, jeopardizing patient access to care. We are especially concerned about this impact in rural and underserved communities. Failure to act on longer-term reforms will undermine Medicare’s ability to deliver on its promises to future seniors and generations,” the group of 46 Senators said in the letter.

Bipartisan legislation is on the table, with the Supporting Medicare Providers Act of 2022 looking to avert the 4.42 percent cuts to the Medicare physician pay rate. The bill was introduced by Representatives Ami Bera, MD, a Democrat from California, and Larry Bucshon, MD, an Indiana Republican. The AMA and several other industry groups have backed the bill, urging providers and their congressional leaders to act on it.