A continued pattern of declining reimbursement amid already challenging economic circumstances has many physicians concerned about what the future holds. Here are three updates physicians should know about reimbursement rates:
1. CMS cut overall physician pay by 1.25% for 2024. The Medicare conversion factor for the new rule is now $32.74, a 3.2% decrease from 2023. Some physicians may face additional cuts due to the cost-performance category of CMS' Merit-based Incentive Payment System, potentially reducing payments by up to 9%.
CMS has also recently updated the MIPS program to include a total of three reporting categories. In addition to the traditional MIPS reporting, eligible physicians can report under the Alternative Payment Model Performance Pathway or the MIPS Value Pathways. The APP reporting model is a streamlined process for physicians who are already reporting under the APM model. The MVPs option is the newest reporting option, seeking to provide physicians with a subset of measures and activities relevant to their specialties or certain medical conditions.
2. There could be more cuts next year. In July, CMS released its annual proposed changes to the physician fee schedule for 2025, which included a proposed 2.8% conversion factor decrease from 2024. This translates to a $32.36 physician fee schedule conversion factor in 2025, down from $33.29 in 2024.
The continued cuts lead to concerns about the viability of private and independent practices moving forward.
"Continued cuts in the face of unprecedented consolidation while at the same time facing high inflation will lead to a continual collapse of private practice," Adam Bruggeman, MD, surgeon and CEO of Texas Spine Care Center in San Antonio, told Becker's in July. "This leads to reduced access, increased costs and lower quality. Physicians are rapidly leaving independent practice and this will only accelerate the run to the exits."
3. Decreases in reimbursements have impacted some specialties more than others. Sixteen specialties saw reimbursement declines in 2024, with 13 of those seeing cuts despite higher volumes per beneficiary. These included psychiatrists, cardiologists, urologists, OB-GYN, internal medicine, internists, pulmonologists, radiologists, gastroenterologists and anesthesiologists.
The continued cuts result in some physicians having to face difficult financial decisions.
"With continued cuts, physicians will be forced to limit the number of Medicare patients they see. They will not grow their practices. They will not innovate. They will not thrive," Amit Mirchandani MD and founder of Seva Pain and Wellness in Lewisville, Texas, told Becker's. "Some physicians may leave the profession or retire early because the immense care and effort it takes to care for our elderly may not be worth the diminishing reimbursement. And possibly worst of all, physicians may not encourage their own children to become physicians themselves."