APA Services joined more than 120 healthcare provider organizations in a letter to both House and Senate leadership urging action (PDF, 83KB)opens in new window to ensure that Medicare payments to clinicians in 2025 and beyond keep pace with inflation. Although the final rule delineating Medicare payment rates and policies for 2025 has not yet been released by the Centers for Medicare and Medicaid Services (CMS), the agency proposed reducing the conversion factor used in calculating all providers’ reimbursement rates by 2.8% to comply with the current statutory freeze in annual payment updates scheduled to last until 2026. The freeze in payment increases is scheduled to last until 2026, when updates will resume at a rate of only 0.25% per year, well below inflation rates. This is the fifth year in a row that CMS has proposed lowering payments to clinicians. The coalition letter noted that the scheduled 2.8% decrease in payment rates in 2025 will coincide with an expected 3.6% increase in practice cost inflation, as measured by the Medicare Economic Index (MEI). The letter also noted that adjusted for inflation, on average, Medicare provider payments have declined by 29% from 2001 to 2024.
Congress has usually stepped in to mitigate the cuts, yet provider payments under Medicare Part B have consistently lagged inflation, unlike payments to other portions of the Medicare program. The failure of Medicare payment rates to keep pace with inflation makes it challenging for psychologists and other clinicians to participate in the program.
On October 15, 2024, a group of 232 House members led by Representatives Mariannette Miller-Meeks, MD (R–Iowa), Jimmy Panetta (D–California), Ami Bera, MD (D–California), Larry Bucshon, MD (R–Indiana), Kim Schrier, MD (D–Washington), Greg Murphy, MD (R–North Carolina), John Joyce, MD (R–Pennsylvania), and Raul Ruiz, MD (D–California) joined together in sending a letter to Speaker Mike Johnson (R–Louisiana) and Minority Leader Hakeem Jeffries (D–New York) (PDF, 1.22MB)opens in new window urging movement of legislation to stop the 2.8% payment cut from occurring next year, to provide physicians and other clinicians with a permanent, annual inflationary update in Medicare equivalent to the MEI. The letter also urged enactment of related policies changes to ensure that Medicare provider payments keep pace with the cost of delivering quality care to beneficiaries.
APA Services has been working alongside other provider groups to push Congress to address the continuing slide in Medicare payment updates. APA members partnered with APA Services to send over 13,000 messages to their members of Congress urging a fix this year.
For more information, contact Scott Barstow.