Congress Ditched Fix to Medicare Doc Pay Cut in Skinny Budget Bill

Following a tumultuous week of negotiations, Congress passed a skinny budget deal early Saturday morning, which President Biden signed into law, averting a government shutdown and continuing funding through mid-March.

The compromise bill included $110 billion in relief for victims of natural disasters and for farmers. However, for physicians and many other healthcare stakeholders, the provisions stripped out of the final bill were more notable than what remained.

For example, while an earlier version of the budget legislation included a near-total reversal of cuts by the Centers for Medicare & Medicaid Services (CMS) to the Medicare Physician Fee Schedule, with a 0.3% reduction in payments, the passed bill included the agency’s full 2.83% cut.

Medicare Cuts

Bruce A. Scott, MD, president of the American Medical Association (AMA), responded to the bill in a press release, noting that it “utterly fails to address declining reimbursement rates for Medicare, pushing our health system down a path that will have predictable and deleterious results.”

In advancing the 2.83% cut, Congress ignored the recommendation from the Medicare Payment Advisory Commission (MedPAC) to implement a “rational permanent, inflation-based update,” he added. “It didn’t even offer doctors a Band-Aid in the form of a cut reduction, as the cost of delivering care rises 3.5% next year.”

Overall, including these latest cuts, Medicare payment rates have declined 33% in the past two decades, after adjusting for the costs of managing a practice, Scott said. Such cuts will lead to more challenges for patients seeking access to healthcare and more physicians having to close or sell their practices, he warned, urging lawmakers to advance meaningful long-term reforms in the future.

A ‘Dangerous Game’

For context, conservatives in Congress helped spike the earlier bipartisan version of the bill after eleventh hour pressure from President-elect Trump and his billionaire confidant Elon Musk, with Musk posting more than 100 messages on X criticizing the deal, including several inaccurate claims.

When that bill collapsed, Trump urged Republicans to pass a pared-down bill that included a provision to suspend the federal debt limit. However, that bill also failed to pass the House on Thursday, in a vote of 174-235, with 38 Republicans opposing the measure.

Anders Gilberg, senior vice president for government affairs for the Medical Group Management Association, criticized the “dangerous game” he said lawmakers were playing by not eliminating the 2.83% cut to physician reimbursement starting Jan. 1, as the earlier continuing resolution would have done. (Disclosure: Gilberg is a member of the MedPage Today editorial board.)

“Now 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,” Gilberg said in a press release.

“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 to fix a reimbursement system that continues to destabilize the Medicare program,” he added, calling for permanent reforms to the payment system.

Telehealth Flexibilities, Prior Authorization

However, Gilberg applauded Congress for extending — temporarily — telehealth flexibilities and the Geographic Practice Cost Index floor, an adjustment to payments meant to reflect differences in the cost of doing business in different parts of the country.

The final bill includes a 3-month extension of telehealth flexibilities, as well as an extension of funding for community health centers, the National Health Service Corps, and teaching health centers that operate graduate medical education programs.

Carol Langford, MD, MHS, president of the American College of Rheumatology, praised the short-term extension of telehealth coverage provisions, noting that “over 58.5 million Americans live with rheumatic disease, and for many of these individuals, it can be difficult to access care due to mobility restraints, limited regional availability of rheumatologists, or cost constraints that make care unaffordable.”

“Extending telehealth coverage will ensure continued access to care for mobility-challenged or rural patients,” she said in a press release.

However, Langford also expressed frustration over Congress’ failure to eliminate or reduce Medicare physician payment cuts, to pass measures that would “bring transparency to pharmacy benefit manager practices,” and to reform the prior authorization process.

Pediatric Cancer Research

The pediatric cancer community was “devastated” when measures to reauthorize funding for childhood cancers were scrapped from the agreed-upon House bill on Friday, Nancy Goodman, founder and executive director of the advocacy group Kids v Cancer, told Newsweek.

“There’s a profound inequity here. All we’re asking is that if the science advances so there’s better treatment for adults, give kids a crack at getting those results, too,” she said, pointing out that only about 4% of funding from the National Cancer Institute is directed toward pediatrics.

However, one of four cancer-related bills, the Gabriella Miller Kids First Research Act, which included $12.6 million in annual cancer research funding through 2031 to study the biology of childhood cancers and structural birth defects, was revived by the Senate and ultimately passed as a stand-alone bill on Saturday.