10% physician pay cut by CMS looms large

The 2022 Medicare Physician Fee Schedule proposed rule includes a large pay cut for physicians to meet the budget neutrality requirements.

Earlier this year, CMS proposed cutting physician pay rates 3.75 percent next year on top of a 2 percent sequestration on physician pay set forth by the Budget Control Act of 2011, among other cuts. Physician practices also face a 4 percent statutory pay-as-you-go sequester from the American Rescue Plan Act, and the 3.75 percent temporary increase in the physician fee schedule conversion factor is set to expire.

All together, physicians face around 10 percent pay from CMS cut next year as expenses to run their practices increase amid the pandemic, and staff are demanding higher pay rates amid nationwide shortages.

Congress has delayed the physician pay cuts due to sequestration for many years. Will it once again avoid additional physician fee cuts for next year?

The American Medical Association has asked congressional leaders to end the looming 2 percent sequester all together in a July 21 letter. The letter asks Congress to "reimagine" how Medicare pays physicians to a more data-driven and fair system.

"We've asked Congress to take a look at what has been heaped upon the Medicare payment system over the last decade or so and start to think about what we would do if we could begin again," said Todd Askew, senior vice president of advocacy for the AMA.

The Association of American Medical Colleges also submitted a letter Sept. 13 to CMS asking the agency to persuade Congress to at least maintain the 3.75 percent increase to the conversion factors for the next two years, and prevent sequestration cuts in 2022. The organization also asked CMS to delay transitions to the Merit-based Incentive Payment System Value Pathway to eliminate burdensome reporting requirements.

These cuts would affect key physician specialties for ASCs and office-based specialists including cardiologist, vascular surgery, orthopedics, spine, gastroenterology and more. Since 2007, the Medicare pay rates for orthopedists have dropped 3 percent, gastroenterology 6 percent, cardiac surgery 8 percent and cardiology 22 percent, according to a Health Management Associates analysis.

Marc Garcia, MD, board member and health policy advisor to the United Specialists for Patient Access, said in a Sept. 20 statement the cuts would "continue to exacerbate the deterioration of quality healthcare to the patient."

He also pointed out the cuts may increase Medicare spending and lead to higher premiums and deductibles, disproportionately affecting minority communities.

"In order to control patient flow and increase market share, large hospital systems are gobbling up physician networks and office-based specialists," Dr. Garcia said. "The bad news, of course, is that consolidation ultimately limits competition and drives up healthcare costs, leaving the patient to foot the bill for the increase in costs for the services they receive from doctors and hospitals. The harsh reality is that small healthcare providers and office-based providers can't stay in business with inadequate reimbursement rates from the federal government."


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