Congress approved a $1.7 trillion spending bill that includes Medicare payment cuts despite healthcare stakeholders asking Congress to intervene before the cuts go into effect next year.
The cuts were finalized in the 2023 Physician Fee Schedule published by the Centers for Medicare and Medicaid Services (CMS) in November. The PFS comes at a challenging time for the healthcare industry, which has been consistently strained by the COVID-19 pandemic and is now facing higher costs, inflation and a tight labor market.
The spending bill, which was a wide-ranging piece of legislation to fund the country, partially blocked the planned 4.5% cut to physicians, but the reimbursement cut to doctors will grow over the next two years, The Washington Post reported. Plus, Congress lowered the incentive bonus payment for Medicare payment testing models from 5% to 3.5%. Finally, Congress extended telehealth benefits through 2024. They were originally set to expire five months after the public health emergency (PHE) winds down.
Some healthcare industry groups were disappointed in the final move.
“The [American Medical Association] is extremely disappointed and dismayed that Congress failed to prevent Medicare cuts next year, threatening the financial viability of physician practices and endangering access to care for Medicare beneficiaries,” AMA CEO Jack Resneck said in a statement. “This 2% cut following two decades of flat payment rates will have consequences on healthcare access for older Americans.”
However, despite the AMA’s response, the American Hospital Association (AHA) applauded Congress for many of its actions.
“Specifically, we are pleased that this bill prevents significant four percent Medicare PAYGO cuts to providers, extends two key programs for two years that help rural hospitals keep their doors open, and extends for two years critical waivers for telehealth and hospital-at-home programs that have led to improvements in care and made medical treatment more convenient and accessible for patients,” Rick Pollack, CEO and president of AHA, said in a statement. “Additionally, we appreciate Congress giving partial relief to physicians by rolling back Medicare payment cuts and including important provisions to improve the nation’s preparedness for the next pandemic, train the next generation of caregivers, bolster behavioral healthcare providers and expand access to behavioral health services.”
Congress also addressed Medicaid eligibility changes set to take effect after the PHE ends. The Biden administration expanded Medicaid eligibility during the COVID-19 pandemic, and a whopping 18 million are estimated to lose their eligibility at the end of the PHE.
According to the AHA, the spending bill will help states “prepare for changes in Medicaid eligibility due to the end of the Public Health Emergency could help them transition those individuals to other forms of health coverage.”
Unlike AHA, the Medical Group Management Association (MGMA), was also disappointed in the final spending bill and its healthcare provisions, calling the forthcoming spending cuts “short-sighted.”
“MGMA is deeply dismayed by the failure of Congress to adequately address the full 4.5% cut to the Medicare conversion factor set to take effect on Jan. 1,” said Anders Gilberg, senior vice president of government affairs at MGMA. “It is unconscionable that while every other provider category in the Medicare program is receiving a positive 2023 inflation update, physician rates will be cut. Medical practices are in no way immune to the impact of the broader economy, and have been suffering from significant staffing shortages, wage inflation, and drastic cost increases across the board. Any cut to the Medicare conversion factor is simply untenable in this environment."
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."