Congress Urged Not to Implement Medicare Payment Cuts

The American Medical Association and every state medical society have authored a letter to Congress urgently requesting them to intervene before the new Medicare payment cuts take effect in 2023. Congress has until January 1, 2023, to stop these cuts. The organizations’ letter highlights the challenges the healthcare sector is now experiencing.

Hospitals and health systems have encountered billions of dollars in losses this year. Negative operating margins resulted almost entirely from the aftermath of the COVID pandemic. Factors include lower revenues and a change in patient mix — patients are now sicker and have longer stays. Higher costs from supply chain issues and labor shortages continue, with little relief on the horizon. In addition, hospitals are now facing rising patient populations as winter and holidays spike COVID, flu, and RSV rates.

The cuts were part of the 2023 Physician Fee Schedule issued in early November. The amounts represent a 4.5% across-the-board cut — and, in particular, eliminated the 3% supplemental payment awarded to healthcare providers during the COVID-19 pandemic. Physicians also face a 4% Medicare cut stemming from the Statutory Pay-As-You-Go Act.

Their letter was clear about the potential effects, “This desperately needed relief will help provide crucial short-term financial stability for practices until permanent, bipartisan payment reforms are enacted.”

The American Medical Association stressed that physicians are particularly burned out from the COVID-19 pandemic — cutting payment rates can only worsen the labor shortages. The U.S. faces a physician shortage already as more baby boomers turn 65 in the coming years. And now, 1 in 5 physicians are considering leaving their practice within two years. The AMA projects that these cuts will hasten this trend causing Medicare recipients stress as they seek the medical help promised to them and the generations to come.

Their letter to Congress continued, “The stark reality is that adjusted for inflation in practice costs, Medicare physician pay has declined 22% from 2001 to 2021. Allowing cuts to Medicare payments is simply unacceptable during this time of record inflation and coming on the heels of a highly disruptive pandemic.”