Medicare 2024 Base Rate Cut Triggers Calls for Pay Overhaul

Physicians next year can expect a 3.4% drop in the conversion factor that determines their base Medicare pay, according to federal officials, but they also will receive more money for primary care and treating complex conditions.

The Centers for Medicare and Medicaid Services (CMS) on Thursday released its 2024 final physician fee schedule, triggering renewed concerns from doctors’ groups, who protested CMS’ cuts when they were first previewed earlier this year.

The 2024 conversion factor, or base rate for clinician pay, will be $32.74, a decrease of $1.15, or 3.4%, from this year’s level. The pay cuts come as costs of providing healthcare are expected to rise as much as 4.6% in 2024, the American Medical Association (AMA) said.

The new rule follows a 2% payment reduction in 2023, AMA president Jesse M. Ehrenfeld, MD, MPH, said in a statement.

“This is a recipe for financial instability,” Ehrenfeld said. “Patients and physicians will wonder why such thin gruel is being served.”

The AMA is among the many physician groups pressing Congress to change its approach to paying clinicians and consider inflation rates in determining future payments.

Medicare already includes automatic inflation adjusters in other payment rules, such as the ones for care provided in hospitals. But Congress in 2015 eliminated this feature for the physician fee schedule when it passed the Medicare Access and CHIP Reauthorization Act (MACRA).

A pending House bill, the bipartisan Strengthening Medicare for Patients and Providers Act (H.R.2474), would return to permanently including a broader inflation adjuster in the Medicare physician fee schedule.

“This long-overdue change would not only help provide greater stability within the Medicare payment system, but it would also help physicians’ practices — many of whom operate as small business owners — more effectively navigate the ever-changing economic factors that impact their practices, including rising medical costs, workforce and labor challenges, administrative burdens, office rental prices and more,” wrote Larry Bucshon, MD (R-IN), Ami Bera, MD (D-CA), Raul Ruiz, MD (D-CA), and Mariannette Miller-Meeks, MD (R-IA), last month, in an opinion article in the newspaper The Hill.

Major changes to determining Medicare physician pay remain unlikely this year. Still, Congress has softened or blocked slated cuts in physician pay in recent years, passing temporary “doc fixes” as add-ons to spending packages.

E/M Add-on Payment

“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,” said Douglas White, MD, PhD, president of the ACR.

Kerry Dooley Young is a freelance journalist based in Washington, DC. Follow her on Mastodon and Threads as @kerrydooleyyoung.

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