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Status of 2024 Medicare Physician Fee Reductions

WHITE PAPER: Status of 2024 Medicare Physician Fee Reductions

January 29, 2024

Latest Update on CMS Physician Fee Reductions

Unfortunately, there have been no changes to the update we issued on January 1, 2024.  Our industry still awaits action to reduce or eliminate the 3.4 percent Medicare payment reduction which went into effect on January 1st.

On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that cut physician payments (including those for orthopedic surgeons) by 3.37[1] percent, effective January 1, 2024.  In a press release the same day, CMS’ Administrator Chiquita Brooks-LaSure opined [paraphrased]:

CMS remains steadfast in our commitment to supporting physicians…CMS is taking important steps toward those goals by improving payment for primary care and access to mental health care, paying for new navigation services, supporting family caregivers, paying for community health workers to address health-related social needs, and enhancing access to dental care.

This 3.37% reduction comes after three years of consecutive cuts to Medicare physician reimbursement, making the 4-year total almost 10 percent.  According to the American Medical Association, when adjusted for inflation, Medicare physician payment has already declined 26 percent from 2001 to 2023.

Compounded with CMS’ own estimates of a projected 4.6 percent increase in average practice expenses in 2024, Medicare-accepting physician groups are adjusting to an 8 percent blow.

As in prior years, physician groups are responding by reducing or eliminating services, freezing new hires, delaying clinical improvements, pausing the transition to value-based care, and other undesirable countermeasures. 

On December 9, 2023, Congressman Greg Murphy, MD introduced legislation, the Preserving Seniors’ Access to Physicians Act, a bipartisan measure to prevent the full Medicare physician fee schedule cuts from being implemented on January 1, 2024.

On December 13, 2023, 194 members of Congress signed and sent a letter to the Republican and Democratic leaders of the House and Senate urging them to rescind the cut.  Congress adjourned in December without addressing the issue.

Last year, on December 23, 2022, Congress rolled back a similar CMS Medicare payment cut of 4.5 percent to about 2 percent. 

What’s Next?

Congress will need to address another funding package in January, and that package could incorporate some relief for the 3.37 percent Medicare cut.  In the past, Congress has addressed Medicare physician payment cuts retroactively.  Today’s Congress is unpredictable: it may completely or partially rescind the cuts or do nothing.

Every year we go through this damaging and unproductive exercise.  A growing number of members of Congress are calling for a new remedy to address Medicare physician payment cuts.  One relatively simple partial fix would be to limit CMS positive or negative adjustments to the conversion factor to no greater than 2.5% each year, thereby providing stability by eliminating large and abrupt changes in reimbursement.


[1] The final CY 2024 PFS conversion factor is $32.74, a decrease of $1.15 (or 3.4%) from the current CY 2023 conversion factor of $33.89.






Physician-Led Healthcare for America


Letter to Congressional Leaders


American Medical Group Association (AMGA)


US Congressman Gregory F. Murphy, MD [representing the 3rd District of North Carolina]


Health Administrative Partners



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