Medicare & Medicaid

Medicare pay cuts coming in 2024 with Jennifer Hananoki, JD


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The Centers for Medicare & Medicaid Services is trying to cut physician Medicare payment yet again. Jennifer Hananoki, JD, assistant director on the AMA Federal Affairs team, joins to address the proposed 2024 Medicare physician pay schedule. She breaks down the 3.36% cut to physician reimbursement, plus what the MIPS scores for 2022 and Oct. 9 deadline to file an appeal mean for physicians. AMA Chief Experience Officer Todd Unger hosts


  • Jennifer Hananoki, JD, assistant director, Federal Affairs, AMA

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Unger: Hello and welcome to the AMA Update video and podcast. In its proposed 2024 Medicare physician pay schedule, the Centers for Medicare and Medicaid Services has included yet another disastrous cut to physician payment.

Here to break down what CMS is proposing and what the AMA is doing about it is Jennifer Hananoki, assistant director on the AMA federal affairs team in Washington, D.C. I'm Todd Unger, AMA's chief experience officer in Chicago. Jennifer, thanks so much for joining us today.

Hananoki: Yeah. It's great to be here.

Unger: Well, we're staring down the threat of another payment cut with CMS's proposed 2024 physician pay schedule. Let's just start by having you give us an overview of the key details that are in the proposal.

Hananoki: OK. Happy to do that. So the most important thing to note is that CMS is proposing a 3.36% cut to the 2024 Medicare physician payment schedule conversion factor. And it largely stems from two factors. One is the 1.25% reduction that comes out of a temporary legislative update. And the second is from a negative budget neutrality adjustment linked to a CMS developed office visit add on code.

This is the latest proposed cut that physicians face. And it comes on the heels of a 2% cut in 2023. In this same rule that we're talking about, the CMS is projecting that the cost of inflation, as measured by the Medicare Economic Index, is going to increase by 4.5% for 2024. So physician payment before this proposed cut was already unsustainable. And it continues to get worse.

Unger: Jennifer, this new cut is truly unconscionable. What has been the AMA's response to this?

Hananoki: Yeah. Agreed, Todd. This latest proposed cut further threatens access to high quality physician care for the more than 50 million older adults and people with disabilities who are enrolled in Medicare. The AMA in response submitted a 120-page comment letter to CMS detailing just how damaging this cut would be for physicians and their patients.

And the AMA specifically calling on the Biden administration to lower the utilization estimate for that new office visit add on code that I mentioned to reflect the ongoing ambiguity about when to report the code and because of the impact of patient cost sharing. Reducing the utilization estimate would reduce the negative impact on the conversion factor.

At the same time, the AMA and our partners in organized medicine are advocating on the Hill for Congress to pass HR 2474, which would provide a permanent annual update equal to the increase in Medicare Economic Index.

Unger: Jennifer, the proposed rule is over 2,000 pages. What else do physicians need to know about what's in there?

Hananoki: Yeah. Great question, Todd. There are several other key issues to know about this rule. So CMS appears to be following the AMA's recommendations to continue or implement policies on telehealth and diabetes prevention while delaying implementation of other problematic proposals, specifically regarding the center's appropriate use criteria program as well as for billing split or shared visits.

Regarding telehealth in particular, CMS has proposed maintaining the waiver of geographic originating site restrictions through December 31, 2024. So what that means is that Medicare beneficiaries can connect with a physician from their home anywhere in the U.S. In our comment letter, the AMA also applauded CMS for proposing coverage for hemoglobin A1C test for diabetes and prediabetes screening.

The AMA has also raised numerous concerns about the burden and workflow disruptions of the appropriate use criteria program, which requires consultation of AUC for advanced diagnostic imaging by an ordering professional and then claims based reporting of that information by the rendering physician. AMA's supported the indefinite delay of this program until all of the burdens and its negative impact on physicians and patients can be resolved.

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And then I also wanted to mention that the AMA supported CMS's proposal to delay for one year implementation of its policy to allow only a physician or nonphysician who spends more than half the total time with the patient during a shared visit to bill for it. And AMA is strongly urging CMS to adopt new CPT guidelines that allow split or shared visits to be billed based on either time or the level of medical decision making.

Unger: Thanks, Jennifer. Now, the 2024 reduction to the conversion factor isn't the only pay cut that CMS is trying to impose on physicians next year. They're also facing potential penalties from the Medicare Merit-based Incentive Payment System, or MIPS. What's the situation there? And I think it's urgent.

Hananoki: Yes. Good question. So the AMA is hearing more and more from physicians and group practices that they're going to be hit with a MIPS penalty in 2024, which is based on the 2022 performance period feedback. And these penalties under MIPS can reduce Medicare payment by as much as 9%.

So the backstory is important to keep in mind here because physicians were automatically held harmless from any MIPS penalties during 2019, 2020 and 2021 due to the COVID-19 pandemic. And the AMA have serious concerns that MIPS resuming in 2022 may be unfairly penalizing physicians due to a lack of awareness of the expiration of those automatic flexibilities.

Moreover, we have serious concerns about the increase in weight of the cost measures. The cost measures were zeroed out in 2020 and 2021 due to the pandemic. And physicians had no information about how they were being measured on them during the 2022 performance period. And, in fact, they only saw which patients they were attributed, which measures they were scored on and their observed costs in August of 2023. So they had no way to monitor or improve their performance on those measures when it mattered. Now, MIPS penalty on top of another Medicare payment cut and high inflation could be the final blow to some practices, particularly small, independent and rural practices.

Unger: And CMS recently released MIPS scores for 2022. Given the significant impact that they could have, what if practice leaders and physicians need to do right now?

Hananoki: Yes. That's right, Todd. So MIPS performance feedback and final scores for 2022 are available now. And these scores determine whether a physician or a group practice will receive positive, a neutral, or a negative payment adjustment on care delivered to Medicare patients in 2024. And physicians can view this information on the Quality Payment Program website using their HCQIS access role and profile credentials.

And we're strongly encouraging physicians and group practices to go in and look at this information as soon as possible because if there was an error or if you feel that you should have been eligible for the COVID-19 hardship exemption, for example, and it was not applied, then that practice or that physician must submit an appeal, which CMS calls a targeted review, by October 9.

Unger: So just for extra emphasis, that deadline for that appeal, October 9. And we're trying to get out the word out on that to all physicians at the AMA. You can also find that quality payment program website at And we'll include a link in the episode description as well. These MIPS penalties and the never ending payment cuts that seem to be coming are why the AMA has made reforming Medicare payment its number one priority. Jennifer, what progress have we made so far on this this year?

Hananoki: Yeah, Todd. What I will say is that momentum is really building for reform. In July, a bipartisan group of 101 House members signed a letter calling for urgent action on problems in health care, which included Medicare physician payment. Earlier this year, the bill HR 2474, which we've mentioned a couple of times, was introduced. And that bill would provide annual inflation updates to physician payment based on the Medicare Economic Index. And the AMA is constantly meeting with policymakers up on the Hill to increase support and co-sponsors for this bill.

The AMA and physicians across the country have sent 150 letters to Congress and generated 150,000 contacts to policymakers through the AMA's website and others. And in order to be successful, we know that it's vital to keep this issue front and center. And we've been doing just that in media, interviews, in op eds, and online.

Unger: So a lot of work being done. And again, everybody out there, that's why it's so important to stand with us at the AMA. Jennifer, thank you and the entire advocacy team for everything that you're doing to help get out the word about these important updates today. That's it for today's episode. We'll be back soon with another AMA Update. In the meantime, you can find all our videos and podcasts at Thanks for joining us. Please take care.

Disclaimer: The viewpoints expressed in this video are those of the participants and/or do not necessarily reflect the views and policies of the AMA.