Doctors, hospitals denounce Medicare payment plans for 2024

Physicians and hospitals aren’t happy with the federal government’s planned payments for 2024.

Jesse Ehrenfeld, president of the American Medical Association, said planned Medicare payments to doctors are insufficient. (Photo: AMA)

On Thursday, the Centers for Medicare & Medicaid Services announced plans for payment schedules for doctors and outpatient services. Both final rules engendered significant criticism.

Payments for doctors

The CMS has approved a 3.4% reduction in the conversion factor, the formula used to determine Medicare’s physician payments, in 2024.

Jesse M. Ehrenfeld, president of the American Medical Association, called it “a recipe for financial instability.” He adds the cuts continue a two-decade pattern of reductions in payments to doctors.

Ehrenfeld says the cuts are especially ill-timed in light of Medicare’s own estimate of a 4.6% increase in medical practice costs. Physicians’ groups have urged Congress to tie physician payments to inflation on an annual basis.

“There is widespread acknowledgement that access to care is being threatened,” Ehrenfeld said in a statement. “The declining revenues in the face of steep cost increases disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or other historically minoritized or marginalized patient communities.”

Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said in a statement that the slated cuts are “further increasing the gap between physician practice expenses and reimbursement rates, and dangerously impeding beneficiary access to care.”

The American Academy of Family Physicians praised CMS for provisions in the fee schedule that offer better reimbursement for primary care. Steven P. Furr, the academy’s president, called it “an investment in better patient access and better patient health outcomes.”

But Furr also criticized the planned cut in Medicare’s conversion factor, saying it “will result in untenable payment cuts for family physicians and reiterates the urgent need for long-term Medicare payment reform.”

Advocates for doctors and medical groups plan to push Congress for more support.

"Congress must pass legislation to stop this downward spiral in the Medicare program and at a minimum avert CMS’ 3.4% cut to the conversion factor," the MGMA's Gilberg said.

Hospital payments

CMS is offering increases in payments to health systems for outpatient services, but hospitals say the slated bump isn’t sufficient.

The agency said it finalized an increase of 3.1% in outpatient payments for 2024.

Stacey Hughes, executive vice president of the American Hospital Association, called it an “inadequate increase.”

“Today's increase for outpatient hospitals of only 3.1% comes in spite of persistent financial headwinds facing the field,” Hughes said in a statement. “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.”

The hospital association plans to press Congress for additional support. Hospitals and health systems say Medicare hasn’t adequately supported them in the face of their higher costs.