Congress Fails to Prevent All Medicare Payment Cuts
By Jarrod Fowler, MHA, FMA Director of Health Care Policy and Innovation | Updated Dec. 21, 2022
Over the past several months, the FMA has been informing our members that physicians faced Medicare payment cuts as high as 8.42%, effective Jan. 1, 2023. This included a 4.42% cut to the conversion factor related to budget neutrality and a 4% PAYGO sequester tied to the American Rescue Plan Act. On Dec. 20, Congress released the text of its omnibus bill, which addresses these cuts. Unfortunately, Congress chose not to resolve all of the cuts in its package. Therefore, effective Jan. 1, 2023, physicians will see a 1.92% reduction in the Medicare conversion factor. Then, effective Jan. 1, 2024, physicians will see a 3.17% reduction in the Medicare conversion factor. The 4% PAYGO cuts were postponed until 2025.

The FMA and other medical societies across the nation are extremely disappointed with this outcome, which we worked hard to prevent. These cuts come on top of years of payment updates that have not kept pace with inflation at a time when costs are soaring.
In fact, adjusted for inflation in terms of practice costs, the value of the Medicare conversion factor declined 22% from 2001 to 2021. This illustrates that the Medicare system is deeply in need of systemic reform that offers physicians the same type of inflationary updates that other Medicare providers receive annually. Rest assured that the FMA will continue fighting for improved outcomes as we move toward 2024 and beyond.

The omnibus bill also includes several other items related to healthcare. For instance, the telehealth flexibilities that were scheduled to end 151 days after the expiration of the COVID-19 Public Health Emergency will be extended through 2024. Additionally, in fiscal year 2026, the bill creates 200 new residency slots with 100 reserved for psychiatry.

What the FMA did to fight these cuts
  • Wrote 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