Q&A: 2024 physician fee schedule means 'untenable payment cuts for family physicians'

Key takeaways:

• The new physician fee schedule reduced its conversion factor for Medicare payments from $33.89 to $32.74.
• The G2211 add-on code is a positive step toward more appropriate compensation for family physicians.

Reductions to the 2024 Medicare conversion factor will mean unsustainable payment cuts for family physicians, according to the president of the American Academy of Family Physicians.

CMS issued a final rule announcing Physician Fee Schedule policy changes for Medicare payments on Nov. 2. Notably, the 2024 physician fee schedule reduced its conversion factor for Medicare payments from $33.89 to $32.74.

Although CMS said in a press release that the final rule is one of several that “reflect a broader administration-wide strategy to create a more equitable health care system that results in better access to care, quality, affordability and innovation,” medical organizations have raised the alarm. A statement from the AMA referenced 20 years of cuts to physician pay and called the latest move “a recipe for financial instability.”

Healio spoke with Steven P. Furr, MD, FAAFP, president of the AAFP, to learn more about the cuts to physician pay, how they will affect PCPs, what could be done to improve the payment system and more.

Healio: What are your thoughts on the cuts to physician pay? Why is this happening?

Furr: I want to start by saying that family physicians are glad to see new policies finalized in the 2024 Medicare physician fee schedule final rule to support access to care. However, the finalized reduction to the Medicare conversion factor will result in untenable payment cuts for family physicians and will continue to strain physician practices and create barriers to care for patients enrolled in Medicare.

The bottom line is that broader reform is needed to appropriately compensate physicians for the work we do and protect Medicare beneficiaries’ access to primary care in their own communities.

Healio: What will these cuts look like in peoples’ practices? What will their consequences be?

Furr: Medicare payments have not been adjusted for inflation, which can make it hard for practices to invest in the tools, staff and resources needed to continue to provide comprehensive, high-quality care.

Family physicians are consistently reporting that they are being asked to do more with less — patients have pressing behavioral health needs and more chronic conditions, but payment rates are going down. In some cases, practices relying on insufficient Medicare payments won’t be able to keep their doors open, will have to sell their practice, reduce staff or be forced to accept fewer Medicare patients.

Coupled with a growing workforce shortage, patients will be hit hard — especially in rural and underserved communities where there already are not enough primary care doctors.

Healio: What could be done to improve the physician payment system?

Furr: The most urgent and important step is for Congress to modernize Medicare’s outdated physician payment system by enacting annual inflationary adjustments and providing relief from budget neutrality requirements. We’re supportive of the bipartisan Strengthening Medicare for Patients and Providers Act, which would help update Medicare physician payment rates.

Healio: What are your thoughts on the increases in payment for primary care visits? How will this help primary care physicians and their practices?

Furr: The AAFP has been supporting implementation of the G2211 Medicare add-on code. This essential code will more appropriately value the complex, continuous services family physicians provide — including managing chronic conditions and acute problems, modifying medication doses, administering vaccines, providing preventive screenings and counseling on healthy habits.

The G2211 add-on code is an incremental but meaningful step toward more appropriately valuing and paying for the complex, longitudinal care family physicians provide. Simply put, G2211 is an investment in better patient access and better patient health outcomes.

Healio: Will the increases for primary care visits affect Medicare beneficiaries’ access to primary care?

Furr: Evidence indicates that more appropriately paying for primary care services can improve access to care for patients. However, G2211 is just one incremental step — and it does not address the fundamental issues with the Medicare physician payment system that are leading to annual payment cuts.

Failure to invest in a more sustainable Medicare payment system will not only jeopardize beneficiaries’ access to care but a practice’s ability to keep their doors open. On the patient side, continued payment cuts will hamper beneficiaries from accessing primary care, behavioral health care and other services they need.

Healio: What else should PCPs know about the changes to the Medicare physician payment schedule?

Furr: It’s important to know that Medicare payment cuts have far-reaching effects on many other corners of health care. Several other health systems and payment schedules base their payment rates on the Medicare physician fee schedule, including TRICARE, state Medicaid agencies and other insurers. Therefore, it’s important that Medicare rates accurately reflect the way physicians serve their patients and communities.

The AAFP continues to advocate for policies that seek to improve Medicare physician payments and enact an inflationary update. We know that any reduction in payments to PCPs could threaten practice stability and exacerbate PCP shortages. This has broader implications, too, as we also know that inadequate compensation is one reason why many medical students choose not to go into primary care.

Healio: Is there anything else you would like to add?

Furr: To truly achieve the promises of health reform, we need delivery and payment systems that prioritize primary and preventive care and provide physicians with the resources and flexibility they need. Family physicians can’t reform Medicare payment alone, so we are asking Congress to modernize Medicare payments to help transform our health care system, combat consolidation and meet the needs of a growing and aging population.

References:

• Calendar year (CY) 2024 Medicare physician fee schedule final rule. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2024-medicare-physician-fee-schedule-final-rule. Published Nov. 2, 2023. Accessed Nov. 6, 2023.
• Medicare payment cuts ‘thin gruel’ for seniors, physicians. https://www.ama-assn.org/press-center/press-releases/medicare-payment-cuts-thin-gruel-seniors-physicians. Published Nov. 2, 2023. Accessed Nov. 6, 2023.