Congress Adjourns Without Easing Medicare Doc Pay Cut

Congress abandoned plans to ease 2025 Medicare payment cuts for clinicians in its stopgap spending bill, frustrating physicians who’ve long pressed lawmakers to fix a “broken” reimbursement system.

Amid divisions among Republicans, both Houses passed a slimmed-down continuing resolution to avoid a government shutdown. The bill, which President Joe Biden signed Saturday, keeps federal operations running through March 14. It also temporarily extends some telehealth flexibilities for older adults.

“It didn’t even offer doctors a Band-Aid in the form of a cut reduction,” said Bruce A. Scott, MD, president of the American Medical Association (AMA), in a statement.

By AMA calculations, Medicare payment rates have fallen by 33% over the past two decades when adjusted for the costs of running a practice, Scott said. In 2025, physicians will face an effective 2.83% pay cut for treating Medicare patients.

“Physicians are frustrated, and patients are angry. With another cut almost certain to take effect, Congress must enact meaningful long-term reforms,” Scott said. “Patients and physicians are counting on cooperation to reform Medicare.”

The must-pass nature of continuing resolutions makes them attractive targets to carry other unrelated changes in federal law.

An earlier version of the spending bill would have eased a planned 2025 cut in a key component used in setting clinicians’ pay. That change would have lowered physicians’ effective Medicare pay cut to 0.33% in 2025, compared with nearly 3%.

The earlier bill also would have tightened federal oversight of pharmacy benefit managers.

“Physician practices head into the new year facing uncertainty and financial shortfalls that not only negatively impact the viability of their Medicare business but their commercial contracts tied to Medicare rates, as well as Medicaid reimbursement in states that use Medicare as a benchmark,” said Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association.

“Lawmakers are playing a dangerous game that will ultimately hurt patient access to physicians who can no longer deal with the chaos caused by congressional inaction,” Gilberg added.

Continual Doc Fixes?

The Medicare physician fee schedule’s policies help shape care of many of the nation’s senior citizens and those with disabilities.

About 1.4 million clinicians billed last year through the physician fee schedule for care of 28.2 million people enrolled in traditional Medicare, with the tab for these services reaching a total cost of about $92.4 billion. These are estimates cited at a December 12 meeting by the staff of the Medicare Payment Advisory Commission (MedPAC), on which Congress depends heavily in setting policies for the giant federal health program.

Congress has struggled for decades to rationalize Medicare’s payments for clinicians, seeking to maintain access to care for the nation’s senior citizens while also restraining cost growth.

As part of the Balanced Budget Act of 1997, lawmakers opted for a mechanism called the sustainable growth rate (SGR) to restrain spending on Medicare pay for clinician services. Congress then acted repeatedly through so-called “doc fix” legislation to block cuts mandated by the SGR, leading to a complete revision of this approach in 2015.

Congress that year passed the Medicare Access and CHIP Reauthorization Act. The law was intended to shift clinicians toward programs that would peg pay increases to quality measures. But these efforts foundered, leaving a system where federal law mandated keeping the physician fee schedule’s base rate, or conversion factor, frozen amid rising inflation.

There’s widespread agreement on a need to revise Medicare’s approach to clinician pay, with even MedPAC seeking major changes.

In response, Congress enacted a series of one-year-only increases for the conversion factor from 2021 to 2024, MedPAC staff noted in a recent discussion of clinician payment. MedPAC staff also noted that other Medicare payments for physicians have risen in recent years, due in part to an increase starting in 2021 for outpatient evaluation and management office visits.

Still, MedPAC members have voiced concerns about what signals Congress sends to clinicians through freezes and cuts in the physician fee schedule.

MedPAC member Lawrence P. Casalino, MD, PhD, MPH, said at the December meeting that he struggled to balance the need to control Medicare spending with the need to maintain or improve access and quality.

“No one likes to be told that their annual pay each year, indefinitely, year after year, is not going to keep up with inflation,” Casalino said. “Over time, I think that’s likely to affect the morale of physicians and other clinicians, and that this can’t help but result in worse access and lower quality of care.”

MedPAC’s recommendations are based in part on surveys that suggest most people enrolled in Medicare can still get appointments with physicians. MedPAC staff said at the December meeting that its most recent data found people enrolled in Medicare continued to report access to care that was at least as good as that reported by people with private insurance.

Darryl Drevna, senior director for regulatory affairs at the American Medical Group Association, said this view is flawed.

“Access is a lagging indicator,” Drevna told Medscape Medical News. “Our members can’t continue to absorb payment cuts, and they’re telling us they already have or are seriously considering eliminating services. Eventually patient survey results will reflect that, but it’s happening now. Costs are up and reimbursements are down. This is the frustrating but entirely predictable outcome.”

Kerry Dooley Young is a freelance journalist based in Washington, DC. Follow her onLinkedIn andBluesky andThreads.