Reps back reforms to Medicare Physician Fee Schedule, starting with physician reimbursement

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Congressional leaders should take up legislation to block a planned 2.8% cut to physician reimbursement in the 2025 Medicare Physician Fee Schedule (MPFS), according to a bipartisan group of lawmakers.

In a letter to House of Representatives Speaker Mike Johnson and Minority Leader Hakeem Jeffries, the legislators said “Congress must pass a bill providing physicians and other clinicians with a payment update that takes into account the cost of actually delivering care to patients.”

The cut marks the fifth consecutive year that the U.S. Centers for Medicare & Medicaid Services has issued a fee schedule that lowers payments to doctors and other clinicians, the letter said.

“While Congress has stepped in the past four years to pass legislation to mitigate portions of these cuts, the fact remains that the MPFS is inherently broken,” the letter said. “Continued payment cuts undermine the ability of independent clinical practices — especially in rural and underserved areas — to care for their community, which reduces patient access to care.”

The situation for rural practices is becoming more and more difficult, they said. Medical groups and health systems are imposing hiring freezes, delaying improvements, delaying their transitions to value-based systems, and possibly eliminating services, the letter said.

“Because healthcare often comprises a large percentage of employment in rural areas, the closure of independent practices not only lessens patient access to care but also jeopardizes the livelihood of rural Americans,” the lawmakers said.

The best solution: provide physicians and other clinicians with a permanent, annual inflationary update in Medicare equal to the Medicare Economic Index. Additional reforms are needed in the MPFS budget neutrality requirements and the budget neutrality threshold should be updated to reflect 2024 dollars.

CMS also must review key elements of practice costs concurrently and at least every five years. The MPFS also should have limited changes to no more than 2.5% per year, according to the lawmakers.

Doctors respond

In a statement, American Medical Association President Bruce A. Scott, MD, said as the November election approaches, the lame duck session of Congress is the time to act. The budget cut is scheduled to take effect on Jan. 1, 2025.

Medicare patients must continue to have access to medical care, Scott said, and the representatives’ awareness is bringing together a divided Washington.

“As the letter says, the Medicare physician payment system is ‘inherently broken,’” Scott said in his statement. “Indeed, Medicare payment rates have fallen by 29% over the past two decades, when adjusting for the costs of running a practice, threatening patient access and practice viability. Patient access to Medicare is especially imperiled in rural areas and underserved communities.

“We have an upcoming election and only a short time to act,” Scott said. “But the good news is that instead of gridlock, we have agreement. Instead of conflict, we have compromise. Let’s get to work and pass these crucial policy changes before the end of the year.”

There were 233 representatives, including some of the physicians serving in Congress, that signed the letter. Scott called it a solid bipartisan majority.