AMA Continues Call for Medicare Payment System Fix During Interim Meeting

The American Medical Association (AMA) is calling for a fix to what it calls a flawed Medicare payment system. The 2024 payment scheduled called for a 3.4% cut to physicians.¹ However, the Medicare Economic Index, which is a measure of inflation in medical practice costs, will be 4.6% in 2024. According to AMA, the payment cut combined with inflation results in an 8% decline in physician payment.

Jesse M. Ehrenfeld, MD, MPH, president of the American Medical Association

Image credit: American Medical Association

At the AMA’s Interim Meeting of the House of Delegates, President Jesse M. Ehrenfeld, MD, MPH, noted that physician payment under Medicare has dropped 26% since 2001 after adjusting for inflation.

“I don’t know many businesses in any industry that could withstand a 26% drop in revenue and still survive—much less an industry like ours that is so essential to the health, vitality and economic well-being of our nation,” he said.²

While CMS has announced changes to programs, like the Medicare Shared Savings Program, that have garnered praise from some in health care, there are widespread concerns over the 3.4% cut to physician fees.

Reactions From Other Organizations

Susan Dentzer, president and CEO of America’s Physician Group, said, “The situation is unsustainable, and we look forward to working with Congress and other policymakers to redress these fee cuts soon.”³

Approximately 120 organizations of state medical associations and national medical societies sent a joint letter to Congress urging them to fix the payment system. The letter called on Congress to pass legislation to stop the next round of Medicare payment cuts.

“If Congress does not act by the end of the year to stop this impending payment cut, many physicians will be forced to reduce available health care services, cut office hours, or even forgo treating Medicare patients altogether,” the organizations wrote in the letter. “America’s physicians and their patients deserve better.”

The American Medical Group Association (AMGA) noted that the cut hinders the ability of multispecialty medical groups and integrated systems of care to deliver high-quality care.⁴ A recent survey by AMGA highlighted some of the responses members plan to take if the cuts take effect as planned on January 1, 2024. The most common responses to the cuts expected in 2024 are eliminating services, hiring freezes or delays, delays to making delivery system improvements or implementing care model changes, and eliminating or delaying social determinant of health investments.

The groups also discussed actions they took in 2023 in reaction to the previous year’s Medicare payment cuts. Nearly a quarter said they furloughed or laid off staff and half said they will have to furlough or lay off staff in 2024 if the 3.4% payment cut is implemented. In addition, 44% said they eliminated Medicare services in 2023 and 21% had already delayed social determinant of health investments.

“Investment in critical areas such as technology and care redesign is impossible when our members have been forced to absorb cumulative reductions in the conversion factor over the past decade,” Jerry Penso, MD, president and CEO of AMGA, said in a statement.⁴

The Positives of the Proposal

AMGA did note that the proposal included a policy to treat telehealth visits equal to in-person visits, continuing practices that were implemented during the COVID-19 public health emergency.

The American College of Rheumatology (ACR) also welcomed the telehealth flexibilities, as well as a new code for complex, chronic conditions.⁵

“We’re encouraged to see that CMS listened to our concerns and extended telehealth flexibilities as well as implemented the G2211 code, which will help Medicare beneficiaries and their physicians better manage complex and chronic rheumatic diseases,” Douglas White, MD, PhD, president of the ACR, said in a statement.⁵

Finally, the National Association of ACOs (NAACOS), noted that the rule finalized policies that support clinicians in accountable care organizations with improved quality reporting, fairer benchmarking, a better transition to a new risk adjustment model, and more.⁶ However, Gil Gaus, ScD, president and CEO of NAACOS, noted that “several favorable policies only apply to new or renewing ACOs in 2024, leaving out existing ACOs.”

References

1. Calendar year (CY) 2024 Medicare Physician Fee final rule. Fact sheet. CMS.gov. November 2, 2023. Accessed November 17, 2023. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2024-medicare-physician-fee-schedule-final-rule

2. Ehrenfeld JM. Leadership speech. Presented at: 2023 Interim Meeting of the American Medical Association House of Delegates; November 10-14, 2023; National Harbor, MD. https://www.ama-assn.org/press-center/speeches/jesse-m-ehrenfeld-md-mph-address-2023-interim-meeting-hod

3. APG statement on CMS 2022 Medicare Physician Fee Schedule final rule. News release. America’s Physician Groups. November 3, 2023. Accessed November 17, 2023. https://www.apg.org/news/apg-statement-on-cms-2022-medicare-physician-fee-schedule-final-rule/

4. Congress must act to prevent Medicare cuts in 2024 Physician Fee Schedule. News release. American Medical Group Association. November 2, 2023. Accessed November 17, 2023. https://www.amga.org/about-amga/amga-newsroom/press-releases/11022023-1/

5. American College of Rheumatology reacts to CY 2024 Medicare Physician Fee Schedule. News release. American College of Rheumatology. November 2, 2023. Accessed November 17, 2023. https://rheumatology.org/press-releases/american-college-of-rheumatology-reacts-to-cy-2024-medicare-physician-fee-schedule

6. NAACOS statement on final 2024 Medicare Physician Fee Schedule. News release. NAACOS. November 2, 2023. Accessed November 17, 2023. https://www.naacos.com/press-release--naacos-statement-on-final-2024-medicare-physician-fee-schedule