Congress must act to avoid Medicare reimbursement cut in 2023, senators say

Payments could drop by almost 8.5%, according to AMA and other health care groups.

Physicians hope a letter to Senate leaders sparks interest and action by Congress to avoid a nearly 8.5% cut to Medicare reimbursements in 2023.

The American Medical Association praised the Nov. 2 missive sent by 46 senators to Senate Majority Leader Sen. Chuck Schumer, D-New York, and Minority Leader Sen. Mitch McConnell, R-Kentucky.

The senators wrote “to express our serious concerns regarding the stability of Medicare payments to health care provider,” said the letter. Sen. Debbie Stabenow, D-Michigan, and Sen. John Barrasso, MD, were the top co-signers with 44 other Senators on the bipartisan message.

Physicians continue to face financial woes due to higher practice costs and the effects of the COVID-19 pandemic, the lawmakers said. Without congressional action to avoid cuts to Medicare reimbursements, things will get worse, they said.

“Financial uncertainty due to pending payment cuts will only compound these challenges,” they said. “It is essential in the coming weeks that we make sure providers have the resources they need to keep their doors open for seniors and families.”

Cuts coming in 2023

The U.S. Centers for Medicare & Medicaid Services (CMS) released the 2023 Physician Fee Schedule (PFS) rule on July7; CMS’ final rule was issued Nov. 1. By law, the rule must be budget-neutral, so any projected spending increases must be offset within the PFS.

The 2023 PFS would cut physician payments by 4.42%. AMA strongly supports bipartisan legislation, the “Supporting Medicare Providers Act of 2022,” introduced in the House of Representatives to stop that scheduled cut.

PAYGO in place

Next year, the Statutory Pay-As-You-Go Act of 2010, known as Statutory PAYGO, would enact a sequestration, or across-the-board reductions, amounting to a 4% cut to Medicare payments, according to analyses by AMA and the American Hospital Association (AHA). That 4% translates to about $36 billion, according to AHA, which estimated hospitals would lose out on Medicare payments of up to $9.4 billion for 2023.

AMA and AHA have called for congressional action to avoid the Statutory PAYGO cut.

“It was immediately apparent that the 2023 Medicare physician payment rates not only failed to account for inflation in practice costs and COVID-related challenges to practice sustainability but also included the damaging across-the-board reduction,” AMA President Jack Resneck Jr., MD, said in a news release.

Congress suspended the PAYGO sequestration at the start of the COVID-19 pandemic, but that moratorium will expire at the start of 2023.

AMA has recommended creating a Medicare Economic Index update for the coming year. The organization also called for Congress and CMS to extend the 5% Advanced Alternative Payment Model to encourage more physicians to transition from fee-for-service to alternative payment models.

Hurting patient access

A number of other physician and health care organizations have weighed in with their analyses about what the cuts would mean in 2023. Along with less money for physicians, the cuts would lead to reductions in charity care, ability to see new Medicare patients, staff, and locations, according to a survey this year by the Medical Group Management Association.

The lawmakers repeated those points.

“Failure to act in the coming weeks could result in reduced staffing levels and office closures, jeopardizing patient access to care,” the senators’ letter said. “We are especially concerned about this impact in rural and underserved communities.”