Physician Pay Cuts Mostly Reversed in Congressional Deal

MedCentral

A deal in Congress would mostly reverse a 2.8% cut in the Medicare Physician Fee Schedule (PFS)  temporarily increases payments under the PFS by 2.5% through 2025, largely offsetting the cut, but it still leaves physicians with a 0.3% pay decrease. The deal still needs to be passed by the House and the Senate.

The deal received mixed reaction from Anders Gilberg, senior vice president, government affairs for the Medical Group Management Association (MGMA). He praised parts of the deal, including extending flexibilities in telehealth through 2026, increasing [Alternate Payment Model] incentive payments to 3.53%, and extending the 1.0 Medicare work [Geographic Practice Cost Indices] floor. “These are big wins for medical groups,” Gilberg said in a statement.

“On the other hand, we are deeply disappointed that Congress failed to fully remedy the looming 2025 Medicare payment cut to physician practices. Any cut, however fractional, is unacceptable,” he said.

Fifth Consecutive Year of Physician Pay Cuts

Bruce A. Scott, MD, president of the American Medical Association, noted last week that “the coming year will mark the fifth consecutive year of Medicare cuts, and physicians’ Medicare reimbursement is down 29% since 2001 when adjusted for inflation.”

MGMA’s Gilberg also criticized lack of legislative relief on Medicare Advantage prior authorization requirements in the deal. The deal does not include the Improving Seniors’ Access to Care Act, which includes provisions such as establishing an electronic prior authorization process and requiring the US Department of Health & Human Services to set up a process for real-time decisions for routinely approved items and services.

“[N]ot including legislation to reform prior authorization, which has the support of a bipartisan majority of the House and Senate, nearly 500 endorsing stakeholder organizations, a [Congressional Budget Office] score of zero, and little to no opposition, represents a huge congressional end-of-year failure and another win for big insurance to the detriment of America’s patients,” said Gilberg in the statement.

Accountability for PBMs

The proposed deal also includes provisions that would increase accountability and transparency for pharmacy benefits managers (PBMs). Among new restrictions is a ban on linking PBM compensation with a drug’s Medicare list price. Critics have said higher drug prices lead to higher fees to PBMs because the higher the price of a covered drug, the larger the potential discount, some of which PBMs keep as profit.

Also under the deal, PBMs would be banned from billing Medicaid states and health plans more for drugs than what they reimburse pharmacies.