CMS Proposes Nearly 3.4% Cut in Medicare Physician Fees for 2024

WASHINGTON — The Centers for Medicare & Medicaid Services (CMS) is proposing a 3.4% cut to the “conversion factor” used to set the Medicare Physician Fee Schedule for 2024, and physician groups are none too happy about it.

“The proposed 2024 Medicare Physician Fee Schedule (PFS) raises significant concerns for medical groups related to its 3.4% reduction to the conversion factor, which further increases the gap between physician practice expenses and Medicare reimbursement rates,” Anders Gilberg, MGA, senior vice president for government affairs at the Medical Group Management Association here, said Thursday afternoon in a statement. (Disclosure: Gilberg is a member of the MedPage Today editorial board.) “Medicare already largely fails to cover the cost of furnishing care to beneficiaries, and the proposed cut to the 2024 conversion factor compounds the problem.”

“While the ACR [American College of Rheumatology] appreciates CMS’ continued recognition of the value of complex care provided by rheumatologists and other cognitive care specialists … we are gravely concerned that the proposed rule’s physician payment cuts contained in CMS’ conversion factor would add to physicians’ uncertainty about their continued ability to provide the highest quality of care to Medicare patients,” ACR president Douglas White, MD, PhD, said in a statement.

The conversion factor is the multiplier that Medicare applies to relative value units (RVUs) to calculate reimbursement for a particular service or procedure under Medicare’s fee-for-service system. The 2024 conversion factor of $32.74 includes both a 2.17% decrease required for budget neutrality reasons and a 1.25% increase that was included in last year’s Consolidated Appropriations Act (CAA); the CAA also increased the 2023 conversion factor.

Those two percentages — a 2.17% decrease partially offset by a 1.25% increase — would normally be considered a 0.92% decrease in physician pay, but the percentages were calculated based on the original conversion factor for 2023 — $33.06 — which was then increased to $33.88 by the raise from the CAA; comparing that number to this year’s $32.74 number results in the nearly 3.4% cut. (See p. 1191 of the proposed rule for more details.)

The American Medical Association (AMA) also panned the cut, with AMA president Jesse Ehrenfeld, MD, MPH, calling it “a critical reminder that patients and physicians desperately need Congress to develop a permanent solution that addresses the financial instability and threatens access to care.”

“When adjusted for inflation, Medicare physician payment already has effectively declined 26% from 2001 to 2023 before additional inflation and these cuts are factored in,” Ehrenfeld said in a statement. “Physicians are one of the only providers without an automatic inflationary increase … Physicians need relief from this unsustainable journey.”

There was one group that applauded the agency, however. “CMS showed its commitment to supporting value-based care and growing participation in accountable care organizations (ACOs) in this proposed rule,” Clif Gaus, ScD, president and CEO of the National Association of ACOs (NAACOS), which represents accountable care organizations, said in a statement. “It addresses several issues that NAACOS has been advocating for, including improvements in quality reporting, more fair benchmarking policies, a smooth transition to a new risk adjustment model, keeping advanced payments for new ACOs who transition to risk, [and] helping ACOs who serve high-cost beneficiaries and others.”

“NAACOS thanks CMS for its continued leadership on this issue and its willingness to address the barriers standing in the way of clinicians and health systems who want to provide higher quality, more cost-effective, coordinated care for patients,” he said.

The fee schedule’s effects, however, vary by specialty. In the 2024 fee schedule, the big loser is interventional radiology, whose fees are estimated to decrease by an estimated 4%. Other losers were nuclear medicine, vascular surgery, and diagnostic radiology, whose fees will decrease by 3%.

The American Society for Radiation Oncology (ASTRO) was not happy with an estimated 2% cut for radiation oncologists and radiation therapy centers. “ASTRO is disappointed that CMS once again undervalues the impact of radiation oncology and intends to cut reimbursement by an additional 2% in 2024 for this essential cornerstone of cancer care,” Geraldine Jacobson, MD, MPH, chair of the ASTRO board of directors, said in a statement.

“Medicare spends less on all radiation therapy services than it does on just three top cancer drugs, although radiation is utilized by twice as many beneficiaries,” she added. “Despite this outsized value, CMS has cut radiation oncology physician fee schedule payments by over 20% in the last decade – more than nearly all other physician specialties.

On the other side of the ledger, the total allowed charges for family practice and endocrinology will increase by an estimated 3%. A number of other specialties will see an estimated 2% increase, including clinical social workers, clinical psychologists, general practitioners, rheumatologists, and nurse practitioners, according to CMS.

For its part, CMS touted several new services that would be covered under the fee schedule. “In alignment with the goal of the Biden-Harris Administration’s Cancer Moonshot for everyone with cancer to have access to covered patient navigation services, CMS is proposing payment for Principal Illness Navigation services to help patients navigate cancer treatment and treatment for other serious illnesses,” the agency said in a press release. “These services are also designed to include care involving other peer support specialists, such as peer recovery coaches for individuals with substance use disorder.”

The proposed rule also calls for coverage of some dental services for cancer patients. “Access to oral and dental health services that promote health and wellness allows people with Medicare to achieve the best health possible,” the release continued. “In this proposed rule, CMS is … proposing that payment can be made for certain dental services prior to and during several different cancer treatments, including, but not limited to, chemotherapy.”