A Jan. 23, 2024, MGMA Stat poll asked the question, “2024 Medicare physician payment was cut 3.4%. Are you concerned about reduced patient access to care?” An overwhelming majority (82%) respondents replied “yes,” while 18% responded “no.” The poll had a total of 407 responses.
Impact on medical groups
The 3.4% cut to the Medicare conversion factor went into effect on Jan. 1, 2024. These are just some of the responses we received that starkly illustrate the consequences that cutting Medicare reimbursement has on patient access and practice operations:
- “Less availability to physicians, they can't give safe quality care on less and less money. Providers will accelerate their retirements or choose another.”
- “More providers will limit the number of Medicare [patients] in their practices.... this is already happening in some communities.”
- “We will be required to reduce staff, which will impact patient access.”
- “My clinic has lost physicians due to decreased reimbursement. Additionally, many providers choose not to accept new Medicare patients.”
- “I have already heard physicians, primary care and specialists, talk about limiting the number of Medicare patients they can take.”
Unfortunately, this reality echoes what MGMA members have previously said about Medicare cuts. MGMA conducted a survey of 517 medical group practices — ranging from small practices to large, 2,500-physician health systems — evaluating how physician practices would respond to proposed Medicare cuts in 2023. Practices considered limiting the number of new Medicare patients, reducing charity care, reducing the number of clinical staff and closing satellite locations.
It’s important to note that many of the respondents who selected “no” noted that their medical groups were owned by larger healthcare systems that would continue to accept Medicare at the system level. These larger organizations have the ability to subsidize the physician practices with inpatient and other revenue unrelated to the Medicare Physician Fee Schedule.
In MGMA’s 2023 annual regulatory burden survey, 87% of medical group practices said reimbursement not keeping up with inflation would impact current and future Medicare patient access. The cut is untenable for group practices and requires congressional intervention.
Background on Medicare payment cuts
Medical groups have faced numerous cuts to Medicare reimbursement over the past several years. These cuts stem from the budget neutrality aspect of the Medicare Physician Fee Schedule and changes made in 2021.
Congress has previously intervened to mitigate these cuts. The 3.4% cut that went into effect this year is related to the phase-in of the complexity add-on code G2211, which had previously been delayed until 2024. Underpinning these cuts is the absence of an annual inflationary update for the Medicare Physician Fee Schedule similar to other Medicare reimbursement systems like for hospitals and skilled nursing facilities.
Our current priority is reversing the full 3.4% cut to the Medicare conversion factor as soon as possible. Since the end of last year, there have been short-term extensions of funding for the federal government which, due to political factors outside of healthcare, led to Congress not addressing the cut and other healthcare policies. The next opportunity to reverse the cut will be before federal government funding expires in early March. Representative Greg Murphy introduced the bipartisan Preserving Seniors’ Access to Physicians Act to reverse the full 3.37% cut — passing this bill or other legislation with similar language is critical.
In addition to reversing the cut, there needs to be sustainable changes made to the Medicare payment system to avoid the negative consequence illustrated by this poll and provide medical groups a stable reimbursement system. Medicare payment needs an annual inflationary update — the Strengthening Medicare for Patients and Providers Act was introduced by a bipartisan group of physicians in Congress and would add an annual inflationary update tied to the Medicare Economic Index (MEI). The Provider Reimbursement Stability Act would make long-needed changes to the budget neutrality aspect of the Medicare Physician Fee Schedule to alleviate these issues moving forward such as increasing the budget neutrality threshold.
Send a pre-populated letter to your congressional representatives through MGMA’s Contact Congress portal telling them to reverse the full 3.37% cut. Here are a few of MGMA Government Affairs’ recent actions taken to reverse the cut: