A 3.4% physician fee cut that affects key nursing home services is set to go into effect Jan. 1, and Congress did nothing to provide relief before adjourning for its winter recess. 

The cut included in the 2024 Physician pay rule, which was finalized by the Centers for Medicare & Medicaid Services in November, affects doctors working in nursing homes and other long-term care settings, as well as pay for therapists and other ancillary services. 

In the last few years, Congress has moved to offset similar reductions, which don’t necessarily reflect true costs of physician services but are required if CMS decides to put a greater share of its funding toward other types of care.

The ongoing regular reductions to reimbursement are “an existential threat” to the long-term care sector’s therapists and other providers who bill Medicare Part B, said Cynthia Morton, executive vice president of advocacy group ADVION, earlier this year.

Congress included a 3% offset to conversion factor cuts for 2023 and planned another 1.25% offset for 2024 in the 2023 Consolidated Appropriations Act. But bills that would help make that 2024 change more significant have not moved forward yet this session. 

Morton told McKnight’s Long-Term Care News that the next best opportunity for a fix is  ahead of the government funding expiration on Jan. 19.

“Whatever funding vehicle will be advanced to continue that, we want to have our Physician Fee Schedule patch attached to that,” Morton said. “It’s important that Congress deal with this patient issue in January because the reductions will have already gone into place on Jan. 1.” 

Looking for silver linings

A rate correction could be made retroactive, as has happened in the past.

While ADVION and other provider groups are still advocating for a full 3.7% patch to address the cut, the Senate Finance Committee has so far passed a 1.5% patch and the House Committee on Energy and Commerce passed a 1.25% patch.

Bills that could be a vehicle for the patch are: the Preserving Seniors’ Access to Physicians Act of 2023 (H.R. 6683), which would eliminate the 3.37% conversion factor reduction; and the Strengthening Medicare for Patients and Providers Act (H.R. 2474), which would add a permanent payment update to the Medicare PFS that is tied to inflation, as measured by the Medicare Economic Index.  

There also was a bipartisan letter of almost 200 House members sent to House and Senate leadership asking them to end the 3.37% reduction, Morton noted.

Meanwhile, the American Medical Association, which represents physicians and physician practices, has warned that Congress’ inaction so far could force some providers to cut office hours or forgo treating Medicare patients.

On Monday, the AMA recommended that lawmakers transfer about $1.8 billion from the FY 2024 National Defense Authorization bill to cover the cut. It includes $2.2 billion in money shifted from the Medicare Trust Fund to a Medicare Improvement Fund, which would be more than enough to stop the cuts.

“Facing a nearly 10% reduction in Medicare payments over the past four years and rising practice costs on top of the burdens and burnout of three years of COVID-19, for many physicians, continuing down this road is unsustainable,” said AMA President Jesse M. Ehrenfeld, MD, MPH. 

“These cuts will be felt first and hardest in rural and underserved areas that continue to face significant healthcare access challenges. Medicare physicians do not receive inflationary payment updates, which is why eliminating these cuts is so crucial.”