The American Medical Association is asking Congress to step in before new Medicare payment cuts go into effect in 2023.
The cuts stem from the 2023 Physician Fee Schedule, which was finalized by the Centers for Medicare and Medicaid Services (CMS) in early November. The cuts will slash payments nearly 4.5% “across the board,” AMA said when the final rule was published. Of note, the final rule strips the 3% supplemental payment awarded to healthcare providers during the COVID-19 pandemic.
The cuts come at a challenging time for hospitals and health systems, which are facing billions in losses this year thanks to negative operating margins. The financial challenges are due in part to lingering impacts of the ongoing COVID-19 pandemic, including a drop in revenue and patient mix in 2022 as patients have tended to come to the hospital sicker and stay longer. In addition, hospitals and health systems face higher costs and high inflation rates, as well as a labor shortage and supply issues.
According to the AMA, Congress has until Jan. 1 to intervene and stop the cuts next year. The AMA, along with every state medical society, penned a letter to Congressional leaders in a desperate plea to block the reduction, citing the numerous struggles the healthcare sector is currently facing.
“We strongly urge Congressional action to prevent the entire 4.5% reduction to Medicare payment rates from being implemented on January 1, 2023,” AMA wrote in its letter. “This desperately needed relief will help provide crucial short-term financial stability for practices until permanent, bipartisan payment reforms are enacted.”
In addition to the economic and labor headwinds, AMA noted that physicians are extremely burned out from the COVID-19 pandemic, and cutting payment rates will only worsen the labor crisis.
“The stark reality is that, adjusted for inflation in practice costs, Medicare physician pay has declined 22[%] from 2001 to 2021,” the letter stated. “Allowing cuts to Medicare payments is simply unacceptable during this time of record inflation and coming on the heels of a highly disruptive pandemic.”
According to the letter, the healthcare industry is in serious risk of losing talent, with 1 in 5 physicians considering leaving their current practice within two years.
“Payment cuts will only accelerate this unsustainable trend and undoubtedly lead to Medicare patients struggling to access healthcare services,” the letter said.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."