A healthcare worker is handed money
Photo credit: ER Productions Limited/Getty Images Plus
A healthcare worker is handed money
Photo credit: ER Productions Limited/Getty Images Plus

Congressional leaders have agreed to increase physician pay by 1.68% starting next week, but that raise still would not make whole a 3.37% cut initiated by the Centers for Medicare & Medicaid Services last fall.

Rates set under the physician fee schedule also apply to therapists and other ancillary providers billing Medicare Part B for services in a nursing home.

Provider organizations across the healthcare spectrum panned the tentative agreement as not going far enough, considering the impact of inflation and other automatic cuts already triggered by a budget rule known as sequestration.

While the House and Senate must still pass a new spending bill that includes the latest attempt to address physician pay — possibly as soon as today — some advocates are already looking beyond that for a more permanent solution. 

“Practitioners and physicians that provide Part B services to patients face these unpredictable reductions year over year that are caused by the budget neutrality requirement of the Physician Fee Schedule,” said Cynthia Morton, vice president of ADVION, which advocates for therapy companies and others working in skilled nursing. 

“We are grateful that Congress responded to our advocacy and returned to provide additional relief for 2024,” she told McKnight’s Long-Term Care News Tuesday. “Efforts now turn to trying to reform the entire Physician Fee Schedule and remove elements that cause the year over year reductions.”

Congress late last year passed a 1.25% “provider relief” patch for 2024. Combined with the pending action, that would mean a 2.93% restoration that “represents billions put back into patient care,” Morton said.

Physicians and other healthcare providers have been fighting for months to get the full cut restored. Most years, Congress passes a patch before its winter recess. This year, the issue has dragged on for an additional 10 weeks as lawmakers also kicked the can down the road on budget resolutions that would have been vehicles for an earlier pay increase.

No retroactive pay

Maxine Hochhauser, CEO of national therapy consulting firm HealthPRO Heritage, said the 2024 cut, compounded by years of prior cuts, “has delivered a significant blow.”

When combined with accompanying lower rates for some major therapy codes, Hochhauser said the cut is approaching nearly 4% in many skilled nursing facilities.

“While we appreciate the partial relief of 1.68%, it remains just that — partial and regrettably non-retroactive,” Hochhauser told McKnight’s. “This modest respite only addresses a fraction of our ongoing struggles, underscoring an urgent need for comprehensive solutions to ensure the sustained vitality of healthcare providers.”

The annual advocacy for additional pay led a bipartisan group of senators to form a new Medicare Payment Reform Working Group, whose leadership acknowledged the process of setting physician pay “has failed to keep pace with the actual cost of care and the improvements in new services and technologies.”

Ahead of the deal currently on the table, 32 Senators called on leadership to finally address the physician pay issue for 2024.

“After three consecutive years of Medicare payment reductions, healthcare providers are at a breaking point and are struggling to maintain access to care for the Medicare beneficiaries they treat,” they wrote. “Facing a nearly 10% reduction in Medicare payments over the past four years, rising practice costs, workforce shortages, and financial uncertainty resulting from the pandemic, some practices are already limiting the number of Medicare patients they see, or the types of services offered. It is anticipated that these cuts will be felt hardest by smaller, independent practices, like those in rural and underserved areas that continue to face significant healthcare access challenges.”