The California Medical Association (CMA) and the American Medical Association (AMA) have submitted detailed comments about he proposed 2024 Medicare Physician Fee Schedule, underscoring serious concerns with the ongoing conversion factor payment reductions in the Medicare Fee Schedule, specifically the 3.36% proposed cut and the corresponding reduction in anesthesia rates.

From 2001 to 2023, Medicare physician payment rates have plummeted by 26% when adjusted for inflation. To compound the problem, the Centers for Medicare and Medicaid Services (CMS) estimates that the cost to practice medicine will increase by 4.5% in 2024. The growing discrepancy between what it costs to run a medical practice and what physicians are paid poses a serious threat to the stability of physician practices and jeopardizes access to care, particularly in underserved areas.  

The budget neutrality payment reductions in the proposed  2024  fee schedule are due to two factors: 1) a -1.25% cut Congress allowed to take effect  last year and 2) a budget neutrality adjustment linked to the implementation of a CMS-developed office visit add-on code. Congress had delayed introduction of this code during the COVID-19 pandemic to prevent payment cuts to specialists.

In response to AMA advocacy, CMS reduced its utilization assumptions from 100% to 38% for the new add-on code, which significantly reduced the amount of the CF payment cuts to all physicians.  However, AMA, CMA and others in organized medicine are urging CMS to further reduce the utilization assumptions because there isn’t clarity about the appropriate circumstances in which to bill this code. Reducing the utilization assumptions would also prevent unwarranted Medicare payment cuts.

AMA and CMA are also urging Congress to pass legislation that would provide an annual, inflation-based payment update to keep pace with costs and to counteract the budget neutrality adjustments in the fee schedule. 

Practice Expense Weighting Proposal Postponed

CMA also applauded CMS’ decision to postpone implementation of the Medicare Economic Index practice expense weighting proposal, which would have negatively and disproportionately impacted California physicians. It would have reduced payment for California’s high practice expenses, such as rent and wages paid to physician office staff, including nurses. This proposal would have reduced Medicare payments to California physicians by nearly $90 million per year.

CMA organized a coalition of medical societies from high-cost states and urged CMS to delay implementation until the AMA Physician Practice Information Survey is finalized because it will collect cost data directly from physician practices. All California physicians who receive the survey are strongly urged to respond, as it will have a direct impact on future Medicare payment. 

For More Information

• CMA’s letter to CMS detailing CMA’s priorities for the 2024 proposed Medicare fee schedule
• AMA’s detailed comment letter on the 2024 Medicare physician payment rule