Advocacy Update

July 22, 2022: Advocacy Update spotlight on Medicare physician pay cuts


The Centers for Medicare & Medicaid Services (CMS) is touting its proposed 2023 Medicare physician payment schedule as a significant expansion of access to behavioral health services and cancer screening.

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But while it will take time to carefully and comprehensively analyze the proposal—which numbers more than 2,000 pages—it is already clear that it needs work because it does not address the harsh economic realities of high medical inflation and continuing COVID-19 pandemic concerns.

According to a statement from AMA President Jack Resneck Jr., MD, “The American Medical Association (AMA) is reviewing the Medicare payment schedule and will have detailed comments later. 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. Such a move would create long-term financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians. We will be working with Congress to prevent this harmful outcome.”

“The AMA and our partners in organized medicine have developed a set of principles (PDF) to guide advocacy efforts on Medicare physician payment reform. This is part of the AMA’s Recovery Plan for America’s Physicians and represents our ongoing work to establish a rational Medicare physician payment system that provides financial stability through positive annual payment updates, improves the financial viability of physician practices, and eases administrative burdens.”

The AMA continues to analyze details in the massive proposal (PDF) but these four instantly came to the fore:

  • A 0% payment update that fails to account for significant inflation in practice costs—a failure that threatens to destabilize the Medicare physician payment system.
  • A reduction of about 4.5% in the Medicare conversion factor, from $34.6062 to $33.0775.
  • The adoption of several changes to the evaluation and management (E/M) Current Procedural Terminology (CPT®) codes that are projected to trigger an additional reduction of about 1.5% to the Medicare conversion factor due to statutory budget-neutrality requirements.
  • The expiration of a 5% incentive payment physicians can earn for participating in an Advanced Alternative Payment Model (APM) or an exceptional performance bonus they can earn under the Merit-based Incentive Payment System (MIPS).

For more information, read the full story from Andis Robeznieks, AMA senior news writer.