The Medicare Patient Access and Practice Stabilization Act would replace the 2.83 percent budget neutrality cut with a 1.8 percent inflationary update
Nov. 22, 2024 (ACP) -- Once again, physicians are bracing for a cut in Medicare payments when the new year rolls around, but the ƹϵεapp is urging the nation's leaders to take action on a bipartisan bill that would stop the cut.
“Our ask of Congress is to pass legislation this year that stops the budget neutrality cut and provides at least a partial update to the 2025 Medicare Physician Fee Schedule (PFS) to account for inflation,” said David Pugach, ACP vice president for governmental affairs and public policy. “We also urge Congress to work on longer-term policy solutions.”
As Pugach noted, data from the American Medical Association have shown a 29 percent decline in Medicare payment rates for physicians since 2001 when accounting for inflation and current practice expenses.
“The laws governing Medicare physician payment policies are intended to control spending and limit growth,” he explained. “We have seen this play out in various ways over the past few decades that have been detrimental to Medicare physician payment in two ways: one that has prevented inflationary updates and another that has hindered the ability of the Centers for Medicare & Medicaid Services to increase payment for specific medical services.”
The Sustainable Growth Rate that was enacted as part of budget legislation in the late 1990s resulted in yearly payment patches until Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), according to Pugach. MACRA prevented a significant cut to physician payments and included an annual 0.5 percent increase to the PFS through 2019, followed by a freeze through 2026.
For each year since 2021, Congress has acted to block at least a portion of payment cuts, but physicians have continued to see their reimbursement levels drop.
“Staffing, rent, medical supplies and other practice expenses have continually increased without any corresponding update to the PFS,” Pugach said. “Unfortunately, these cuts have a downstream impact on patients. No one should be surprised that the period in which these cuts have occurred has corresponded with practices closing and a significant percentage of physicians going from independent practice to being employed. Delays in patient care are also a consequence of these challenges.”
According to Pugach, Congress has not acted to prevent these cuts sooner because “too many lawmakers do not fully appreciate the linkage between protecting patient access and ensuring that payment rates are sufficient to cover the cost of providing care. On a practical level, the cost of legislation that would provide meaningful long-term improvements in payment policy is not insignificant, and Congress would need to identify a way to pay for it.”
A new fix is in the works: a bill introduced in October known as the Medicare Patient Access and Practice Stabilization Act (H.R. 10073).
Under this bill, the 2025 budget neutrality cut, which is estimated to be 2.83 percent, would be replaced with a 1.8 percent inflationary update. “The goal is to enact this legislation to stop a cut from being implemented in 2025 while providing Congress with the time needed to advance comprehensive long-time payment reform legislation next year,” Pugach said.
ACP has been actively working to advance payment legislation this year. “This was one of the issues we prioritized and asked ACP members to discuss with their members of Congress during the August recess,” Pugach said. “We have also been collaborating with other medical societies on joint advocacy efforts. Additionally, in anticipation of a year-end legislative package, the ACP Washington staff has been meeting with Congressional offices, and we are asking our members to participate in a new grassroots advocacy effort that is being circulated the week after Thanksgiving.”
Discussing the odds that the legislation will pass in the “lame-duck” Congress, Pugach said: “While there are challenges and competing priorities, a bipartisan group of 233 members of the House of Representatives signed a letter in October that called for congressional action on physician payment. We hope to leverage and build on that support to push for Congress to address payment this year.”
He also noted that a 2024 payment fix was not enacted into law until March of this year. “Even if it does not happen in December, we will still push for Congress to address this issue next year,” he said.
More Information
Resources for ACP members to urge Congress to support a Medicare payment fix this year and stop scheduled physician payment cuts are available in the .
Back to the November 22, 2024 issue of ACP Advocate