Act Now to Prevent Devastating Medicare Payment Cuts
By Jarrod Fowler, MHA, FMA Director of Health Care Policy and Innovation | Updated Dec. 8, 2022
As we have reported previously, an 8.42% cut to Medicare physician payment is poised to take effect on Jan. 1, 2023. This includes a 4.42% budget neutrality cut to Medicare physician payment and a 4% PAYGO sequester triggered by the American Rescue Plan Act. From what we’re hearing from our partners in medicine, the 4.42% budget neutrality cut is likely to be handled separately from the 4% PAYGO sequester.

The impact of these cuts would be particularly severe in Florida, where an estimated 21.5% of the population is 65 and olderi, the age at which individuals typically become eligible for Medicare. By comparison, 14.1% of Texans and 15.6% of Californians are estimated to be in this age cohortii. In addition, between 2010 and 2030, close to 50% of Florida’s population growth is projected to be driven by seniors 65 and olderiii. Therefore, any cuts to Medicare physician payment will have an outsized impact on the Sunshine State.

The impact of these cuts will extend beyond the Medicare fee-for-service program. Since commercial payment rates are generally a function of Medicare rates, any reduction in the value of Medicare payments is likely to spill over to the commercial rates paid to many physician practices. Thus, these cuts could substantially harm physician practices irrespective of their dependence on Medicare as a payor.

These looming cuts show that the Medicare payment system is deeply in need of systemic reformiv. Adjusted for inflation, the real value of Medicare physician payments declined 20% between 2001 and 2021v. In addition, physicians are the only Medicare providers who are not receiving a positive statutory update tied to inflation this yearvi.

Preventing these cuts is a top priority for the FMA. To that end, we have been meeting and communicating with member of Congress, working with our partners in medicine to amplify our efforts, and working to keep FMA members informed.

What you can do
 To help us avert these cuts, we urge you to contact your Congress members by using this link and submitting the prewritten letter contained within. You can also ask your patients to contact their members of Congress by using the following link: https://patientsactionnetwork.com/action-center?vvsrc=/campaigns/96610/respond

What the FMA has done so far
  • Written letters to each member of Florida’s congressional delegation explaining the urgent need to prevent these cuts and their potential impact on Floridians
  • Held physician-led constituent meetings with numerous members of Florida’s congressional delegation and U.S. Senate members to discuss the issues noted above
  • Signed onto letters with other medical societies explaining the need to prevent these cuts and systemically reform the Medicare payment system
  • Held meeting with other medical societies to coordinate strategies to avert these cuts
  • Distributed statewide calls to action via FMA News

i Kaiser Family Foundation State Health Facts, Population Distribution by Age (CPS)
ii Id
iii Florida: An Economic Overview, Florida Office of Economic and Demographic Research
iv AMA Characteristics of a Rational Medicare Payment System  
v AMA letter to Congressional leadership, September 22, 2022  
vi Id