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Congressional Budget to Reduce Medicare Reimbursement for Physicians

December 21, 2022

Nashville, TN — This week the House and Senate Appropriations Committees unveiled a $1.7 trillion government funding bill for fiscal year 2023. In the legislation, physicians avoided a CMS-proposed fee schedule cut of 4.5%, but will incur a 2% cut in Medicare payment in 2023 and another 1.25% reduction in 2024. TMA was part of a coalition advocating to avoid the cuts altogether.

Over the past year, TMA contacted congressional representatives and addressed the level of physician reimbursement relative to that of other Medicare providers. TMA officials met with Tennessee lawmakers in February and again in the summer about the issues surrounding fair physician reimbursements in Medicare.

During these meetings, physicians asked congressional members to reevaluate the fee system for Medicare and factor in an annual adjustment for physician fees to keep up with inflation, cover the cost of running medical practices and invest in innovation.

“Not only were physicians denied a cost of inflation adjustment, they are receiving a 2% cut, essentially taking back the Covid bump over the next two years,” said TMA CEO Russ Miller. “I do not think anyone will appreciate only getting a 2% cut instead of 8% cut when other providers are getting positive adjustments. This reduction sends a very poor message to all physicians in Medicare."

Physicians received a 2% Covid-19 bonus payment increase the last two years, but it was set to expire as part of the American Rescue Plan. In this omnibus budget deal, Congress is poised to extend the Advanced Alternative Payment (APM) Model participation incentive at a reduced rate of 3.5%. It will then delay a scheduled increase in patient and revenue requirements to qualify for incentives for one year, according to an article published by the AMA.

Doctors faced as much as 8.5% in 2023 Medicare pay cuts, but an advocacy campaign led by the AMA and joined by more than 150 organizations representing over one million physicians and other health care clinicians helped stave off many of the reductions.

Lawmakers have until Dec. 23 to clear the 2023 Omnibus Appropriations bill.