Still No Action from Congress on Medicare Payment Cut
January 26, 2024
On January 18, Congress sent to President Biden another stopgap spending bill, a continuing resolution that keeps federal agencies funded through early March. Enactment of the bill averted a government shutdown, allowing congressional lawmakers to continue negotiations on spending for the 2024 fiscal year (FY) that began on October 1, 2023.
The spending bill did not include relief to physicians who are currently saddled with a 3.37 percent across-the-board spending cut that took effect on January 1, 2024. The cut is a result of policies finalized in the 2024 Medicare Physician Fee Schedule rule that triggered budget neutrality rules and, consequently, a cut to the Medicare conversion factor — the amount Medicare pays per relative value unit. The current conversation factor with the 3.37 percent cut is $32.74.
ACOI and the entire medical society community have been pressuring lawmakers to attach a physician payment fix to a FY 2024 spending package, and the absence of action by Congress should leave physicians feeling frustrated.
The payment cut follows Medicare physician fee reductions in 2022 and 2023 alongside zero inflation updates. At the same time, practice costs and consumer prices have been going up. Since 2001, Medicare physician payments have lagged 26 percent behind the rate of inflation growth.
If Congress is compelled to cancel or mitigate the 3.37 percent cut, physicians will likely have to wait until March — the next deadline for congressional action to keep the federal government funded and open. While physician payment relief does not need to be tied to the federal FY 2024 spending bill, it represents the most viable vehicle. For months, congressional lawmakers have talked about tying a health care package to the spending bill, of which relief from the cuts could be a component.
There is still an opportunity for Congress to act to halt or mitigate the current cut. ACOI is renewing its Call to Action and encouraging every ACOI member to ask their members of Congress to make physician payment relief a priority. With the payment cut already in place, if lawmakers do not hear from physicians, they may construe the silence as a signal the 3.37 percent cut is not being felt by physicians and will not harm beneficiary access to care.
If Congress does cancel or mitigate the cut, it is now unclear whether the Centers for Medicare and Medicaid Services will reprocess claims submitted and paid since January 1.