Clock is ticking for 2024 action on Medicare physician reimbursement, PBM reforms

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There’s been some talk in Washington, D.C., – but no votes yet – on national legislation that could affect issues looming large in U.S. health care.

There is legislation pending that could change Medicare reimbursement, pharmacy benefit managers, prior authorizations for medicines and treatments. But the clock is ticking down to the end of 2024, with limited time for federal lawmakers to meet and vote on those issues.

Medicare reimbursement

The Medicare Payment Advisory Commission (MedPAC) today was scheduled to complete its two-day meeting to deliberate on its next recommendations to Congress. On Dec. 12, commissioners spent approximately 90 minutes discussing physician reimbursement for 2026, without comment on the proposed 2.8% cut that will start Jan. 1.

Avoiding that cut has bipartisan support, including from 18 members of New York’s representatives and Sen. Kirsten Gillibrand, said Jerome Cohen, MD, president of the Medical Society of the State of New York. This week he published a strongly worded statement calling the situation outrageous and unfair.

“This would make this the fifth straight year that physicians have faced real dollar cuts even as all the costs of running of a medical practice continue to rise significantly every year,” Cohen said, citing the reimbursement tracker published by the American Medical Association. “This is grossly unfair. New York physicians are already struggling to keep their doors open, leading to reductions in access to care for our seniors. Failing to fully stop this cut in its entirety and taking steps to end this annual Medicare madness will make this problem even worse.

“Our message is simple – Congress cannot go home for Christmas without fully preventing this cut,” Cohen said.

AMA reacts

While Congress has yet to take action, the MedPAC talks spurred praise from the American Medical Association, which noted the board has acknowledged physician reimbursement should be based on an inflation-based index.

“Physicians are being paid nearly 30% less for the same work we did two decades ago, while costs to provide care and run an office have soared," AMA President Bruce A. Scott, MD, said in a statement.
“At a time of physician shortage, the status quo is unsustainable; it jeopardizes health care access and physician practices across the country,” Scott said. “It takes eight to 10 years to train a new physician, but for many physicians, it truly may only take one more year of these cuts for them to quit.”

To preserve patient access to care, the AMA again urged Congress to reverse the pending 2.8-percent Medicare cut and provide a positive update for 2025, Scott’s statement said. That legislative proposal has strong bipartisan support, he said.

AMA also said Congress should enact meaningful Medicare reform to align payment updates with the growth in the Medicare Economic Index, which measures inflation and the cost of doing business for physician practices, AMA said.

PBM reform

There’s a lengthy list of supporters who hope to quash alleged market abuses of pharmacy benefit managers (PBMs) that negotiate drug prices, according to the National Association of Chain Drug Stores (NACDS). That list includes President Joe Biden, President-elect Donald Trump, at least 39 state attorneys general, and general voters, and evidence comes from the U.S. House Oversight and Accountability Committee, the Federal Trade Commission, and national news media including The Wall Street Journal and The New York Times, said NACDS President and CEO Steven C. Anderson.

“Pharmacies and pharmacists across all practice settings are speaking with one voice about the needed solutions,” Anderson said in a statement this week. “Congress has done the hard work and PBM reforms are ready to go, and the only thing that can stop meaningful progress now is inaction. Let’s get it done.”

Patients Before Monopolies

New bipartisan legislation would stop pharmacy benefit managers from owning pharmacies and driving up prescription drug prices for profits.

This week, Sen. Elizabeth Warren (D-Massachusetts) and Sen. Josh Hawley announced their new Patients Before Monopolies (PBM) Act. It would bar parent companies of pharmacy benefit managers from owning pharmacy businesses and would require parent companies that violate the act to divest its pharmacy businesses within three years.

The senators said the bill also would beef up enforcement powers of the Federal Trade Commission, the U.S. Departments of Justice and Health and Human Services, and state attorneys general.

“The insurance monopolies are ruining American health care. Patients and independent pharmacies are paying the price,” Hawley said in the announcement. “This legislation will stop the insurance companies and PBMs from gobbling up even more of American health care and charging American families more and more for less.”

Warren said the bill would rein in the middlemen entrenched in the health care economy. “PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business,” she said.

PBMs respond

Pharmaceutical Care Management Association (PCMA) President and CEO J.C. Scott published a response to Hawley and Warren’s legislation. He argued it would severely limit patient access to safe and affordable pharmacies.

“The truth is PBM-affiliated pharmacies, including mail-service and specialty pharmacies, have a proven track record of providing convenient, reliable, and affordable options for patients to access prescription drugs,” Scott said. “Mail-service pharmacies could save patients, employers, and public health plans $23.5 billion over 10 years and specialty pharmacies, which are sometimes affiliated with PBMs, have the technology and clinical expertise to enhance the quality of care patients receive, and typically can reduce the cost of extremely expensive specialty drugs by up to 45%.

“Congress should be thoughtful in understanding the value that PBMs provide before taking away consumers’ ability to access their medicines how and where they’d like, while making the cost of prescription drugs more expensive,” Scott’s statement said.

Prior auths

The Improving Seniors’ Timely Access to Care Act of 2024 is prior authorization (PA) reform legislation that remains pending in Congress. It would streamline the PA process in Medicare Advantage plans and this week the Amercian College of Physicians called for representatives and senators to approve it.