CMS blasted for 2024 payment proposals for doctors and hospitals

Jesse Ehrenfeld, president of the American Medical Association (Photo: AMA)

The Centers for Medicare and Medicaid Services revealed reimbursement proposals for physicians and hospitals Thursday, and the plans didn’t exactly elicit cheers.

Physicians were especially unhappy with the proposed 2024 Medicare Physician Fee Schedule. Medicare has proposed a 3.34% reduction in the conversion factor, the complex formula used to determine physician payments.

Anders Gilberg, senior vice president of government affairs for the Medical Groups Management Association, said in a statement that Medicare’s proposal “further increases the gap between physician practice expenses and Medicare reimbursement rates.”

“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,” Gilberg said.

The American Medical Association denounced the prospect of reductions in the physician fee schedule. The AMA said it’s especially alarming given that CMS estimates a 4.5% increase in the Medicare Economic Index, the federal measure of inflation in medical practice costs. The AMA says the inflation jump is the highest of the century, and comes after a 3.8% increase a year ago.

Jesse Ehrenfeld, president of the AMA, said that adjusted for inflation, Medicare physician payments have dropped 26% from 2001 to 2023, and that’s before the proposed cuts.

“This is almost biblical in its impact,” Ehrenfeld said in a statement. “Seven lean years that include a pandemic and rampaging inflation. Physicians need relief from this unsustainable journey.”

The AMA has called for tying physician payments to the Medicare Economic Index, and lawmakers have introduced legislation to do just that.

Medicare also proposed a 2.8% increase in outpatient payments, which the American Hospital Association says is insufficient.

“Most hospitals across the country continue to operate on negative or very thin margins that make providing care and investing in their workforce very challenging day to day,” Stacey Hughes, the AHA’s executive vice president, said in a statement. “Without a more robust payment update in the final rule, hospitals’ and health systems’ ability to continue caring for patients and providing essential services for their communities may be jeopardized.”

In the spring, CMS proposed a 2.8% increase in the rate for inpatient payments, which the hospital association called “woefully inadequate.”

Soumi Saha, senior vice president of government affairs for Premier Inc., criticized the CMS proposals for doctors and hospitals.

“CMS’ proposed payment policies threaten the sustainability of our healthcare system by failing to adequately reimburse providers for the cost of providing care, increasing unnecessary regulatory burden, creating obstacles for the movement towards value-based care, and furthering the divide between providers and payers,” Saha said in a statement.

The American Academy of Family Physicians credited CMS for offering more support for primary care, but the academy says planned cuts in payments to doctors would weaken that effort.

Tochi Iroku-Malize, the AAFP's president, said the proposal would lead to "untenable cuts or all physicians."

"These cuts are unacceptable and could threaten practice stability and undermine physicians’ goals of increasing access to primary care," Iroku-Malize said.

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