The proposed Medicare fee schedule for physicians and other healthcare professionals in 2025 has caused quite a stir in the healthcare industry. The Medicare “conversion factor” (CF) is set to be lower in 2025 than it has been in decades, with the last time it was lower being in 1993. This decrease in reimbursement rates will have a significant impact on healthcare professionals who provide services to Medicare patients.
The steps used by CMS to calculate the proposed CF for 2025 shed light on how the decrease in reimbursement rates has come about. CMS starts by taking the current year CF and removes the financial support allocated by Congress for 2024, which expires at the end of the year. The reduction in the CF for 2025 largely comes from the loss of this support. Additionally, CMS adjusts the CF by an amount specified by Congress, which is 0% for 2025 due to a law passed in 2020. Furthermore, a “budget neutrality adjustment” is applied to the CF to ensure that projected costs do not exceed $20 million in a year, further reducing the reimbursement amount.
One of the unintended consequences of the proposed 2025 CF is the impact it will have on specialties like interventional radiology (IR). IR physicians, who specialize in minimally invasive procedures that are cost-effective and beneficial for patients, are expected to take a significant pay cut due to the changes in the fee schedule and the budget neutrality adjustment. This poses a threat to the value of care delivery, which goes against the goals of CMS in improving healthcare quality.
While many are frustrated with CMS for the proposed changes, it is important to recognize that much of the challenge with the CF is statutory and stems from laws passed by Congress. Only Congress has the power to allocate funds to increase the CF and adjust the outdated budget neutrality adjustment. Healthcare professionals are calling for action from Congress to address the inadequate reimbursement rates and ensure that Medicare patients have access to quality care.
The inadequate pay rates for Medicare providers not keeping pace with inflation have led to a decline in physician payment and contributed to ongoing issues with physician burnout. Healthcare professionals are urging Congress to take action to protect the Medicare system and ensure that patients and providers are not left behind. Bills like H.R. 2474 and H.R. 6371 have been introduced to address these concerns, and it is crucial for Congress to prioritize the needs of healthcare professionals and patients in the Medicare system.