‘Unsustainable’: Doctors weigh in on CMS’ 2024 physician pay cut proposal

Three influential health-care organizations are calling on the Centers for Medicare & Medicaid Services to drop its proposed reduction in physician reimbursements. CMS has proposed a 3.3% cut in the conversion factor, the formula used to determine Medicare’s physician payments, for 2024.

The American Hospital Association, American Medical Association and Medical Groups Management Association expressed their concerns in separate letters to CMS Administrator Chiquita Brooks-LaSure.

“With higher costs for everything associated with practicing medicine, another year of Medicare payment cuts jeopardizes patient access and imperils the physician practices on which so many seniors rely,” AMA President Jesse M. Ehrenfeld wrote. “These cuts are unsustainable and unconscionable.”

Medicare payments to doctors have effectively been cut by 26% when adjusted for inflation since 2001, the AMA said. It also noted that reduced payments could lead to less access to care for Medicare recipients.

Stacey Hughes, the American Hospital Association’s executive vice president, wrote that hospitals are “deeply concerned” about the potential for reduced reimbursements.

“This negative update would pose significant risks to patients’ access to care and health systems’ financial stability, particularly for providers serving historically marginalized communities,” Hughes wrote. “Our concern is heightened by the fact that this cut is coming in the wake of over three years of unrelenting financial pressures on the health-care system due to COVID-19, along with rising inflation, increasing input costs and persisting staffing shortages and supply chain disruptions.”

Hospitals have criticized CMS for what they describe as insufficient payments for inpatient care. In 2024, the increase in payment rates for general acute care hospitals will be 3.1%. The AHA said the increase comes up short because it isn’t keeping pace with hospitals’ higher costs However, the association has applauded CMS for recommending that telehealth flexibilities remain in place throughout 2024. The hospital association is continuing to press for permanent telehealth reforms.

Related: CMS advances 2024 physician fee schedule, health equity agenda: Industry reacts

The Medical Groups Management Association said the proposed cuts paired with the current inflationary environment are “simply unsustainable.” In a recent survey, 95% of its members said the planned cuts in Medicare payments would hurt their ability to deliver high-quality patient care.

Health-care advocacy groups acknowledge that CMS is hampered by federal budget neutrality rules designed to curb the growth of spending.

Since the comment period for the new regulation has ended, the CMS will review all the thousands of comments received and issue a final regulation on or before November 1, 2023.