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Medicare Cuts: Updates and What To Expect
By Mariam Mafee, MD, FACMS
More than 65 million people—nearly 20% of the U.S. population—receive their health insurance coverage through the federal Medicare program. Each year, the Centers for Medicare and Medicaid Services (CMS) updates Medicare payments to physicians and other clinicians through rulemaking, based on parameters established under law. CMS recently finalized payment changes for 2024, including increases in payment for a range of services related to primary care, behavioral health, and direct patient care. Due to a statutory requirement that CMS preserve budget neutrality when adjusting physician payment rates, these service-specific increases necessitated a decrease to the fee schedule conversion factor to offset additional costs.
In November 2023, CMS finalized a 3.4% decrease in the physician fee schedule conversion factor. This decrease was placed on top of conversion factor decreases of 3.3%, 0.8%, and 2% in 2021, 2022, and 2023 respectively. The Medicare conversion factor also has no provision for inflation adjustment. Given that a high proportion of patients with skin cancer are senior citizens, Mohs surgeons’ practices are highly dependent on Medicare insurance payments. The present Medicare payment system has placed enormous financial strain on Mohs surgeons’ offices and threatens U.S. seniors’ access to the highest quality skin cancer care.
To better understand the current state of affairs and what we can anticipate, we discussed updates with Matt Duckworth, Vice President of Government Relations at Hart Health Strategies Inc.
What changes were made in 2024?
Matt D: In brief, the partial “fix” to the cuts that occurred on January 1 represents the only action Congress will be taking on the cuts for Calendar Year 2024.
Originally, a 3.37% Medicare physician pay cut was planned for all of 2024, but Congress decreased this to 1.77% in March of 2024. Therefore, the 2024 conversion factor for dates of service January 1 - March 8, 2024, was $32.74, then CMS established the new conversion factor of $33.29 for dates of service March 9 – December 31, 2024. Ultimately, physicians will receive about a 2% cut to reimbursements in 2024 in comparison to those in 2023.
What can we expect beyond 2024?
Matt D: Looking forward, there are two things to pay attention to:
- Longer-term reforms to the Medicare Access and CHIP Reauthorization Act (MACRA) being considered by a bipartisan Senate working group (press release). In February, six senators announced a Medicare payment reform working group to investigate and propose long-term reforms to the physician fee schedule (PFS) and make necessary updates to the MACRA.
- Potential legislation that could occur in the 2024 Lame Duck session of Congress (November 5, 2024 - Jan 3, 2025) to provide relief from the expected Calendar Year 2025 cuts. We normally see a Member of Congress introduce a bill to avert the annual cuts entirely, although these proposals are rarely successful. I foresee the same happening during the Lame Duck, with the most likely outcome for action, if any, coming in the form of another partial fix to the 2025 cuts.
What can we do individually to prevent maximum cuts?
Matt D: Stay in touch with your lawmakers. Not only do they need to understand how these cuts affect your practice, but what the future looks like for Medicare beneficiary access if these cuts continue. Reach out to the health care staffers that work for your elected representatives and try to establish a rapport by sharing timely, relevant information regarding the cuts. Always offer yourself as a resource to them.
What can the ACMS do as an organization to prevent maximum cuts?
Matt D: ACMS members have to stay engaged with their Members of Congress. The leadership of ACMS cannot be the only members to be in touch with their lawmakers. It takes a concerted effort from the entire membership to ensure that Congress is listening.
Glossary for general terminology related to Medicare:
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA): created the Quality Payment Program (QPP) that changed the way that Medicare rewards clinicians for value over volume, streamlined multiple quality programs under the new Merit Based Incentive Payments System (MIPS), and gives bonus payments for participation in eligible alternative payment models (APMs).
Medicare conversion factor (CF): scaling factor that converts the geographically adjusted number of relative value units (RVUs) for each service in the Medicare physician fee schedule (MPFS) into a dollar payment amount