Congressional support for a physician payment fix is growing ahead of a looming 2025 cut — and so, it appears, is serious consideration of longer-term solutions that potentially would head off annual payment crises.

The Centers for Medicare & Medicaid Services this summer proposed a 2.8% cut to its physician fee schedule, which covers medical directors, rounding physicians, therapists and others who bill Part B services for nursing home patients.

The cut, yet to be finalized, would be the fifth annual and bring the total reduction over the last two decades to 29%, according to the American Medical Association. It would take effect Jan. 1, 2025, giving a sense of urgency to a letter penned by 233 members of the House of Representatives earlier this month.

The cuts are largely dictated by previous Congressional action meant to curb spending. But the physician pay system also does not automatically take inflation into account — a factor representatives from both sides of the political aisle said is threatening to push more clinicians out of business.

“To prevent the very real scenario of insufficient access to physicians and other clinicians treating Medicare patients, Congress must stop the 2.8 percent payment cut from occurring in 2025, enact targeted reforms to statutory budget neutrality requirements, and provide physicians with a payment update reflective of inflationary pressures,” they said in the missive sent to the House Speaker and House Minority Leader.

Their letter, dated Oct. 11 but made public only last week, echoes some of the language in a September letter sent by providers to House and Senate leadership. It was signed by ADVION, which advocates on behalf of nursing home therapists and other ancillary providers; dozens of therapy associations; and surgeons and medical groups from across the US.

Physician pay relief isn’t certain, and it’s certainly not going to come fast in an election year. Most experts are forecasting that any kind of resolution to this year’s fee-schedule conundrum would come in the post-election, lame-duck session of Congress.

“We have to get through the election,” ADVION Executive Vice President Cynthia Morton told McKnight’s Long-Term Care News Wednesday, noting that an existing resolution funding the government runs through Dec. 20. “Congress will need to fund the government past that date, and that legislative vehicle will be the base legislation where provisions will be added.”

ADVION is advocating for a congressional patch, much like those issued in past years, to “backfill” the 2.8% proposed cut. 

CMS is expected to issue a final version of its 2025 Physician Fee Schedule as early as next week, but it is unlikely to change the reimbursement cut substantially because of the laws underpinning its payment calculations.

More permanent workarounds

Those rules are what both physicians, nursing home advocates, and — increasingly — members of Congress want to tackle next. It’s unclear whether Congress has the appetite to do anything substantial about future payment-setting rules before new members are sworn in early next year.

“We also want full-scale reform but not sure if Congress can do that, too, as it’s a tall order,” Morton said. “It could wait until 2025.”

In the meantime, the Senate Finance, House Energy and Commerce, and House Ways and Means committees are waiting for a signal to advance physician pay legislation.

“The results of the election will determine whether the package will be large or small,” Morton added.

She explained that members of the current Congress may decide to tackle the issue more comprehensively to “clear the decks” so that a different Congress, potentially with new majorities and leadership, has a clean slate.

On the congressional letter writers’ wish list are:

  • Legislation to provide physicians and other clinicians with a permanent, annual inflationary update in Medicare equivalent to the Medicare Economic Index;
  • Targeted reforms to statutory budget neutrality requirements that are reflective of 2024 dollars; and
  • Mandated CMS review of how physician practice expenses at least every five years, with a limit on annual changes to a key “conversion” factor in the fee schedule 

“While Congress has stepped in the past four years to pass legislation to mitigate portions of these cuts, the fact remains that the [fee schedule] is inherently broken. Continued payment cuts undermine the ability of independent clinical practices — especially in rural and underserved areas — to care for their community, which reduces patient access to care,” the letter states. 

“The continued cuts have forced medical groups and integrated systems of care to make difficult choices, such as imposing hiring freezes, delaying system improvements, delaying implementation of care model changes including transitions to value-based care systems, and possibly eliminating services.”