Congressional Action on Physician Fee Cut Up in the Air

February 28, 2024

In November 2023, the Centers for Medicare and Medicaid Services released the Calendar Year 2024 Medicare Physician Fee Schedule Final Rule, which reduced reimbursement for physician fee services by 3.4%. The fee cut for 2024, was the result of the fee schedule conversion factor being reduced from $33.89 to $32.74 and the expiration of the statutory payment increase of 2.5% for CY 2023.

In the past, Congress has acted to avert physician payment reductions in Medicare, but not always on a timely basis. However, Congress did not act to address the issue in any of the Continuing Resolutions that did avert other Medicare payment reductions temporarily. In November 2023, the Senate Finance Committee did report to the Senate for consideration the “Better Mental Health Care, Lower-Cost Drugs and Extenders Act”. That legislation contained a provision that would not fully restore the 3.4% amount but would have decreased the reduction by 1.25%. In December 2023, Rep. Larry Bucshon (R-IN) led 196 representatives in sending a letter to House and Senate leadership urging congressional action on the matter.

Since Congress returned in January, members of Congress have been discussing a larger health care package of legislation separate from the appropriations issues. The physician fee reduction has been part of those discussions. The question, however, is when such a package will be considered by Congress and at what level will Congress address the fee cut. It is expected that as in the past, once Congress acts, the Centers for Medicare and Medicaid Services could make payments for some claims retroactive at the higher fee level.