Physicians will see a 2 percent cut in Medicare reimbursement for 2023 and at least an additional 1.25 percent reduction in 2024 based on the passage of the massive $1.7 trillion spending bill that was signed into law by the President on December 29.
Originally, physicians were facing as much as an 8.5 percent reduction in Medicare reimbursement, but thanks to the advocacy efforts of the American Medical Association, KMA, and other healthcare groups, the worst of the cuts were temporarily averted. This includes a two-year postponement of the 4 percent statutory Pay-As-You-Go (PAYGO) sequester triggered by the passage of the American Rescue Plan Act of 2021.
Although the Medicare payment cuts were not as severe as anticipated, the 2 percent cut follows two decades of flat payments and comes as medical practices throughout the country are still experiencing pressures stemming from inflation and the aftermath of the pandemic. The failure by Congress to stop the full amount of the cuts underscores the need for significant Medicare physician payment reform in order to end the destructive cycle of annual cuts and provide much-needed stability for patients and physicians.