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Providers to Take Cuts in Physician Fee Schedule Proposed Rule

Analysis  |  By Jay Asser  
   July 08, 2022

Physician groups are upset by the proposed change in the Medicare Physician Fee Schedule, which includes a $1.53 decrease in the conversion factor for 2023.

Providers face costly cuts to Medicare reimbursements in the 2023 Physician Fee Schedule proposed rule by CMS.

The newly released proposed rule features a decrease of $1.53 to the calendar year (CY) 2022 conversion factor of $34.61, resulting in a conversion factor of $33.08 for CY 2023.

CMS states that the change reflects the expiration of the 3% increase in Physician Fee Schedule payments for CY 2022 as required by the Protecting Medicare and American Farmers From Sequester Cuts Act, along with a 0% conversion factor update and a budget-neutrality adjustment. The 3% bump was put in place by Congress to help providers offset the expenses of the COVID-19 pandemic.

Physician groups have expressed their displeasure and frustration with the proposed rule, suggesting that the cuts not only damage providers, but patients as well.

"It is immediately apparent that the rule not only fails to account for inflation in practice costs and COVID-related challenges to practice sustainability, but also includes a significant and damaging across-the-board reduction in payment rates," Jack Resneck Jr., MD, president of the American Medical Association, said in a statement. " Such a move would create long-term financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians."

The Medical Group Management Association (MGMA), meanwhile, pointed to the additional 4% in cuts coming under Congress' Pay-As-You-Go (PAYGO) law, which calls for cuts to counterbalance an increase in federal spending.

"These proposed cuts, coupled with the 4% PAYGO sequestration scheduled to take effect on Jan. 1, 2023, will have a detrimental impact on group practices, with 58% of recently surveyed groups indicating they are considering limiting the number of new Medicare beneficiaries served should the cuts take effect," said Anders Gilberg, senior vice president of government affairs at MGMA.

The Surgical Care Coalition, which consists of 14 surgical professional associations representing more than 180,000 surgeons across the U.S., also blasted the proposed rule.

"The current Medicare Physician Fee Schedule is broken. It fails to incentivize collaboration and pits doctor against doctor every year," said Joseph C. Cleveland Jr., MD, chair of The Society of Thoracic Surgeons Council on Health Policy and Relationships. "It's crucial that Congress work to address these cuts and create a more sustainable payment system. Failure to do so presents a serious risk to patients during a time of declining access to surgical care and rising prices for services and treatments."

Comments on the proposed rule are due September 6.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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