The agency released the 2024 Physician Fee Schedule Final Rule Nov. 2, which updates the conversion factor to $32.74, a 3.4% decrease over last year. The final rule does improve pay for primary care and mental healthcare, among select items.
The American Medical Association President Jesse Ehrenfeld, MD, issued a statement criticizing the rule. He noted the Medicare Economic Index, which measures medical practice cost inflation, increased 4.6%, the highest in the last 23 years. The drop in physician pay will be challenging, especially for independent physicians.
“This is a recipe for financial instability,” Dr. Ehrenfeld wrote. “Patients and physicians will wonder why such thin gruel is being served. Physicians routinely have faced cuts in the last two decades. Yet, there is nothing routine about the past few years. Physicians have faced the COVID pandemic and subsequent burnout. They have seen the costs soar for running a medical practice, while Medicare payment updates have offered too little relief.”
When adjusting for inflation, Medicare already pays around 26% less than it did in 2001 to physicians, and the gap is slated to widen next year. There has been some movement to update the physician pay methodology to tie it to the MEI, including a recommendation from MedPAC and a bipartisan bill in the House of Representatives, but no changes finalized for next year.
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