‘Unconscionable’: Hospitals, doctors implore CMS to avert cuts for physician payments

Advocates representing hospitals, doctors and medical groups are urging the Centers for Medicare & Medicaid Services to drop plans for cuts in reimbursements for physicians.

In separate letters to CMS Administrator Chiquita Brooks-LaSure this week, the American Hospital Association, the American Medical Association and the Medical Groups Management Association said the reductions would hurt providers.

Given other costs practices and health systems have endured, the groups said the reduced Medicare payments would deliver more pain they can ill afford.

The CMS has proposed a 3.3% cut in the conversion factor, the formula used to determine Medicare’s physician payments, in 2024.

“With higher costs for everything associated with practicing medicine, another year of Medicare payment cuts jeopardizes patient access and imperils the physician practices on which so many seniors rely,” AMA President Jesse M. Ehrenfeld said in a statement. “These cuts are unsustainable and unconscionable.”

The AMA says that Medicare payments to doctors have effectively been cut by 26% since 2001, when adjusted for inflation. The AMA also notes that reduced payments could lead to less access to care for Medicare recipients.

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Stacey Hughes, the American Hospital Association’s executive vice president, wrote in a letter to CMS that hospitals are “deeply concerned” about the potential for reduced reimbursements.

“This negative update would pose significant risks to patients’ access to care and health systems’ financial stability, particularly for providers serving historically marginalized communities,” Hughes wrote. “Our concern is heightened by the fact that this cut is coming in the wake of over three years of unrelenting financial pressures on the health care system due to COVID-19, along with rising inflation, increasing input costs, and persisting staffing shortages and supply chain disruptions.”

In its letter to the CMS, the MGMA says the proposed cuts “paired with the current inflationary environment are simply unsustainable.”

The MGMA said an August survey of its members indicated that 95% said the planned cuts in Medicare payments would hurt their ability to deliver high-quality patient care.

Healthcare advocacy groups acknowledge that CMS is hampered by federal budget neutrality rules designed to curb the growth of spending. The MGMA has asked CMS to work with Congress to adjust Medicare payments for doctors in 2024, and in future years.

The MGMA, AMA and other groups have been pushing Congress to tie annual updates in physician payments to inflation.

Hospitals have also blasted CMS for what they describe as insufficient payments for inpatient care in 2024. In 2024, the increase in payment rates for general acute care hospitals will be 3.1%. The American Hospital Association says the increase is insufficient, since it isn’t keeping pace with hospitals’ higher costs.

However, the AHA has applauded the CMS for recommending that telehealth flexibilities should remain in place throughout 2024. The hospital association is continuing to press for permanent telehealth reforms.