National organizations representing hospitals, doctors, and medical groups are urging the Centers for Medicare & Medicaid Services (CMS) to abandon plans for reimbursement cuts for physicians.
In separate letters to CMS last week, the American Hospital Association, the American Medical Association, and the Medical Groups Management Association said the reductions would hurt providers.
Considering the financial burdens that practices and health systems have already faced, these groups have expressed concerns that the proposed Medicare payment reductions would inflict further financial strain that they can scarcely endure.
In 2024, the CMS proposed a 3.3% reduction in the conversion factor, which is the formula utilized to calculate Medicare physician payments.
“With higher costs for everything associated with practicing medicine, another year of Medicare payment cuts jeopardizes patient access and imperils the physician practices on which so many seniors rely,” AMA President Jesse M. Ehrenfeld said in a statement. “These cuts are unsustainable and unconscionable.”
The AMA reports that, when accounting for inflation, Medicare payments to doctors have effectively decreased by 26% since 2001. Additionally, the AMA highlights that these reduced payments could diminish care access for Medicare beneficiaries.
American Hospital Association’s executive vice president, Stacey Hughes, wrote in a letter to CMS that hospitals are “deeply concerned” about the potential for reduced reimbursements.
“This negative update would pose significant risks to patients’ access to care and health systems’ financial stability, particularly for providers serving historically marginalized communities,” Hughes wrote. “Our concern is heightened by the fact that this cut is coming in the wake of over three years of unrelenting financial pressures on the health care system due to COVID-19, along with rising inflation, increasing input costs, and persisting staffing shortages and supply chain disruptions.”
In their letter to the CMS, the Medical Group Management Association (MGMA) expresses that the proposed cuts “paired with the current inflationary environment are simply unsustainable.”
Furthermore, the MGMA conducted an August survey among its members, revealing that a substantial 95% of respondents believed that the planned reductions in Medicare payments would detrimentally impact their ability to provide high-quality patient care and has called upon the CMS to collaborate with Congress in adjusting Medicare payments for physicians in 2024 and beyond. Both the MGMA and the AMA, along with other groups, have been advocating for annual updates in physician payments to be tied to inflation.
Meanwhile, hospitals have criticized the CMS for what they perceive as inadequate payments for inpatient care in 2024. Despite a 3.1% increase in payment rates for general acute care hospitals in 2024, the American Hospital Association contends that this increment falls short of covering the higher costs incurred by hospitals.
