Docs to see Medicare pay cut nearly 3% next year
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It's official: Doctors face another year of pay cuts from Medicare in 2025 under a rule finalized by the Biden administration on Friday, unless Congress steps in again to avert the decrease.
- Medicare administrators also said payments for hospital outpatient services will increase slightly next year.
The big picture: Physicians will see a 2.9% decrease in their average Medicare payment rates next year, tracking with what the administration first proposed in July.
- Medicare law prevents the program from making annual inflation adjustments to doctor payments like it does for hospitals, nursing homes and other health providers.
- Meanwhile, physician operating costs will increase an estimated 3.5% in 2025, the rule said.
State of play: Lawmakers last week released a bill that would avert the cut and give doctors a partial inflationary boost of 1.8%.
- Congress will likely pass legislation in a post-election session with a temporary "doc fix" to keep at least some portion of the cuts from taking effect, Axios Victoria Knight reported first on Pro.
What they're saying: "For physician practices operating on small margins already, this means it is harder to acquire new equipment, harder to retain staff, harder to take on new Medicare patients, and harder to keep the doors open, particularly in rural and underserved areas," American Medical Association president Bruce Scott said in a statement.
Zoom out: Hospital outpatient departments will see a 2.9% increase in Medicare reimbursement next year, amounting to an extra $2.2 billion for the industry, regulators also announced.
- Home health providers' Medicare payment will increase by 0.5% ($85 million) compared with this year.
- Home health lobbyists said the final policy makes it difficult for agencies to keep up with rising costs, and urged Congress to fix their Medicare payment system as well.
Additionally, the Biden administration finalized new maternal health safety standards for hospitals that offer obstetrical services, though the requirement will be phased in over a longer period of time than originally proposed.
- The American Hospital Association said it appreciated the extended implementation timeline but believes the maternal health policy is still too punitive.
