Bill seeks better fix to Medicare Physician Fee Schedule cuts

In an effort to reform Medicare funding and avert painful cuts to physician reimbursements for services, a bipartisan Senate bill introduced Aug. 1 would increase the agency’s budget neutrality threshold to $53 million.

The threshold, last updated in 1992, would also automatically increase every five years to keep pace with the Medicare Economic Index. Currently, Medicare is obliged to offset or neutralize proposed increases in one part of its budget with spending cuts in another. Medicare reimburses doctors for medical services. The threshold is currently $20 million.

The bill, S. 4935, was introduced by Sens. John Boozman, R-Ark., and Peter Welch, D-Vt., along with Sens. Thom Tillis, R-N.C., Angus King, I-Maine, Roger Marshall, R-Kansas, and Jeanne Shaheen, D-N.H.

Says AOA President Steven T. Reed, O.D.: “We applaud Sens. Boozman and Welch for the visionary direction S. 4935 sets for future growth of health care access. For so many years, physicians of all types, including doctors of optometry, have long been impacted by stagnant Medicare reimbursement.

“The costs to deliver care continue to increase especially in regard to staffing and overhead costs, yet Medicare reimbursement has remained stagnant and proposed cuts only threaten to hamper physicians’ ability to provide valued care. S. 4935 takes a long-term, forward-looking approach to a real solution—not a patch—to address this problem.”

Medicare patients should be able to access quality health care, Sen. Boozman says.

“Ensuring physicians are fairly compensated for their work will help deliver stability to providers so they continue to meet the needs of their communities,” Sen. Boozman says. “I’m proud to lead this bipartisan solution that enhances Medicare’s sustainability.”

Stagnant Medicare reimbursements

In July, the Centers for Medicare & Medicaid Services released its proposed 2025 Medicare Physician Fee Schedule.

Unfortunately, CMS proposed a 2.8%-2.93% physician pay cut next year. The relative value unit (RVU) for services provided would fall from $33.29 to $32.36.

According to CMS, payments are “based on the relative resources typically used to furnish the service. Relative value units (RVUs) are applied to each service for work, practice expense and malpractice expense. These RVUs become payment rates through the application of a conversion factor.”

These latest cuts are part of a nearly two-decade decline in reimbursements, threatening access to health care for the elderly and disabled.

Permanent fix preferred by doctors

With yearly cuts in Medicare reimbursements and rising costs to provide quality health care, it becomes more important than ever for Congress to address the Medicare pay cuts and stabilize Medicare reimbursements now and in the future, says Deanna Alexander, O.D., chair of the AOA Federal Relations Committee.

“Providers need assurance that the Medicare system is not subject to continual cuts, which eventually contribute to a decrease in access to quality health care that our senior population deserves,” Dr. Alexander says. “Uncertainty comes from year after year of cuts and never knowing where the reimbursements are until the end of the year.”

Beyond the AOA, the Physician Fee Stabilization Act is supported by several health organizations including the American Medical Association, American Academy of Ophthalmology, American College of Surgeons, National Rural Health Association, American College of Radiology and American Gastroenterological Association.

CMS will be accepting comments on its 2025 proposals through Sept. 9.

Take action

⏩ Urge Congress to take action. Go to the AOA Action Center and support S. 4935 / H.R. 2474.