Congress Must Pass Legislation by the End of the Year to Avoid Steep Medicare Cuts

September 6, 2022

Medicare providers are facing significant reimbursement cuts starting January 1, 2023. The 2023 Medicare Physician Fee Schedule (PFS) proposal jeopardizes the financial stability of many oncology practices by proposing a cut to the Medicare conversion factor of approximately 4.5%. The rule is expected to be finalized in November 2022.

This steep cut to physician reimbursement—which impacts all services across the fee schedule—is the result of:

  1. A scheduled 0%, or neutral, PFS update for fiscal year 2023
  2. A 1.5% cut required by budget neutrality rules (stemming from changes to work relative value units)
  3. Expiration of the positive 3% payment adjustment Congress passed in December 2021

These cuts are compounded by the 2% sequestration cut that went back into effect on July 1, 2022; and a 4% pay-as-you-go (PAYGO) cut, triggered by the passage of the American Rescue Plan, scheduled to begin on January 1, 2023.

The Medicare Access and CHIP Reauthorization Act also included 5% bonus payments to incentivize participation in Advanced Alternative Payment Models (APMs), including the Oncology Care Model (OCM). OCM ended in June 2022 and will be replaced with the Enhancing Oncology Model (EOM) in June 2023. As a result, there will be a gap year between the expiration of the bonus payments under OCM and the restart of modest annual fee schedule updates under EOM. Absent Congressional action, this will result in the loss of another 5% in reimbursement for some practices, which would disincentivize Advanced APM participation and potentially jeopardize the sustainability of APMs long term.

The Association for Clinical Oncology (ASCO) is very concerned that these cuts will jeopardize patient access to care, since they come as practices, hospitals, and other stakeholders face ongoing uncertainty about pandemic recovery, historically high inflation, staffing shortages, and growing administrative burden. From 2001 to 2021, Medicare reimbursement decreased by as much as 20% when adjusted for inflation.

ASCO remains committed to working with Congress and the Centers for Medicare & Medicaid Services on solutions that ensure long-term stability for oncology providers and preserve Medicare beneficiaries’ access to cancer care.  However, high-quality, equitable cancer care must be available to those who depend on it today.

ASCO joined more than 100 other provider groups in sending a letter to the leadership of the Congressional committees of jurisdiction, urging them to take swift action to avoid these cuts. Furthermore, the Association was among the 120 organizations that endorsed the American Medical Association's Characteristics of a Rational Medicare Payment System.

Contact your Members of Congress using the ACT Network and urge them to: 

  • Provide at least a 4.5% conversion factor adjustment for the PFS for 2023
  • Waive the 4% statutory PAYGO requirement  
  • Provide a one-year inflationary update based on the Medicare Economic Index (MEI)
  • Eliminate the 2% sequestration cut to Part B

These important changes will provide oncology practices with crucial short-term fiscal stability, while simultaneously laying the foundation for necessary long-term payment reforms.

Stay tuned to ASCO in Action for updates, as well as breaking news, advocacy, and analysis on cancer policy.