Pay Freeze for Health Care Providers Proposed

Pay Freeze for Health Care Providers Proposed

Last week the Center for Medicare and Medicaid Services (CMS) proposed a payment rule for 2022 that does not include pay raises for doctors, physician assistants, nurse practitioners and others.

That means there will be a rerun of the battle over this year’s physicians fee schedule, which originally financed a pay increase for primary care providers by cutting payments to specialists.  That battle resulted in Congressional intervention that culminated in an across-the-board 3.75% pay raise for the 2021 calendar year, at a cost of $3 billion to taxpayers.

The payment increase this year enabled Medicare to pay more for office visits and avoid larger cuts for specialists. But they were only possible because Congress decided to increase Medicare spending rather than adhering to the program's budget neutrality requirement.

Now that the short-term boost is due to expire, CMS has proposed a 3.75% reduction in the physician fee schedule's conversion factor, which is used to calculate physician payments, for next year. As a result, total provider payments will not increase in 2022 unless Congress allocates additional money.

Specialists are particularly upset about the pay freeze since they would bear the brunt of the costs.

In addition, physicians and other providers could face additional cutbacks unless Congress puts a stop to Medicare sequestration and other budget rules that require spending reductions.

According to one medical industry expert, health care providers have long complained that Medicare payment rates have not kept pace with inflation. But many experts say that is intentional because their rates were already too high.