After Congress passed a one-week continuing resolution (CR) to avoid a government shutdown, legislators released the text of the long-awaited Omnibus in the early hours of Tuesday morning. The 4,155-page legislation must be enacted by Friday December 23rd to avoid a government shutdown.
With regard to Medicare payment, the legislation fully averts the 4% PAYGO sequestration in 2023 and 2024. As to the Medicare Physician Fee Schedule conversion factor, however, the bill provides only 2.5% worth of relief for the almost 4.5% cut scheduled for 2023, leaving providers with an approximately 2% reduction to absorb next year. For 2024, the bill provides only 1.25% worth of relief. Given that the 2024 conversion factor is unknown as of yet, the real-world impact of that 1.25% is more speculative at this time, but it is expected under this provision that physicians will again suffer an additional payment cut in 2024, relative to both 2023 and 2022.
In the final weeks leading up to release of the Omnibus, lawmakers on both sides of the aisle pressured leadership to ensure that the 4.5% conversion factor reduction was averted in full. A bipartisan letter signed by 115 legislators led by Rep. Wild (D-Pa.) and Rep. Miller-Meeks (R-Iowa) requested that both the PAYGO and conversion factor cuts be stopped entirely, noting that these two reductions would be piled onto the 2% Medicare sequestration cut, which resumed on July 1st of this year. Furthermore, the letter stated opposition “to paying for preventing these cuts with additional provider cuts.” The House GOP Doctors Caucus weighed in with another letter to leadership, requesting a solution to the impending Medicare payment cuts. On the Senate side, Sen. Kennedy (R-La.) introduced legislation to avert the full 8.5% cut to Medicare in 2023, but that legislation was objected to by Finance Committee Chairman Wyden (D-Ore.), because the Kennedy bill bypassed the Committee process and because addressing the physician cuts via standalone legislation may jeopardize inclusion of other priorities in the larger year-end legislation.
The Omnibus does contain a two-year extension of pandemic-related Medicare telehealth flexibilities, as well as an extension of a provision allowing coverage of telehealth services in high deductible health plans with Health Savings Accounts. The legislation would also extend separate COVID-related waivers that allow for the treatment of some emergency department patients and inpatients from their home. The legislation also extends (at 3.5%) an expiring 5% bonus for providers participating in alternative payment models.
Physician groups expressed disappointment that Congress would allow any level of reimbursement reduction to go into effect at a time when providers are facing record inflation and staffing shortages, particularly since the legislation extends the 2% Medicare sequester on providers by another year in 2032, to help pay for other priorities in the bill. Overall, the Omnibus contains over $1.6 trillion dollars of spending. The bill is expected to pass by Friday’s deadline without major changes, but EDPMA will closely monitor all amendments and alert members to any relevant changes, if needed.
Looking ahead, EDPMA will aggressively pressure legislators for permanent reform to Medicare payment, since these annual last-minute crises cause instability in the Fee Schedule that affects beneficiary access to care.