Jan 12, 2024 - Health

Congressional advisers recommend pay increase for doctors

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Illustration: Aïda Amer/Axios

Congress should raise Medicare payments for doctors and hospitals and give additional pay increases to safety-net providers next year, independent advisers to Congress recommended Thursday.

Why it matters: The recommendations from the Medicare Payment Advisory Commission come as doctors urge Congress to reverse a 3.4% cut to their 2024 Medicare rates, which they say will make it harder to practice medicine.

Details: MedPAC members voted to recommend a 1.3% increase to the scheduled Medicare rates for doctors and other providers paid through the physician fee schedule in 2025, which is half of the projected increase in inflation for medical practice costs.

  • Lawmakers don't have to implement MedPAC's payment recommendations — and they haven't recently.
  • In recent years, there's also been a cycle of Medicare trimming physician pay, followed by physicians lobbying Congress to partially undo those cuts.
  • The American Medical Association, which is calling for broader reforms that more closely tie physician payment to inflation, called MedPAC's recommendation a "critical first step."

Advisers also recommended that clinicians get extra payments for services provided to low-income Medicare patients in 2025.

  • The recommendations in total would mean primary care doctors and providers see an average pay increase of 5.7% next year, MedPAC staff predicted. Other clinicians would get a 2.5% average increase.

MedPAC also recommended a 1.5% payment increase above current law to hospitals for inpatient and outpatient services, and called for an extra $4 billion to hospitals that care for a large number of underserved patients.

  • Hospital revenue is improving after years of pandemic-related financial difficulties. But hospitals' Medicare margins are projected to remain low next year, MedPAC staff members say.

Meanwhile, MedPAC recommended Congress cut payments for post-acute care providers next year.

  • The commission voted for a 3% decrease in payments to nursing homes, 7% decrease for home health agencies and 5% decrease for inpatient rehab facilities.
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