Addressing Medicare Payment Cuts: A Bipartisan Call to Action on Telehealth and Physician Reimbursement
U.S. Representative Mariannette Miller-Meeks, alongside 232 bipartisan House members, recently spearheaded a call to action, urging House Speaker Mike Johnson (R-LA) and Minority Leader Hakeem Jeffries (D-NY) to address the imminent 2.8% reduction in reimbursement rates for physicians participating in Medicare. The proposed cuts, scheduled to take effect in January 2025 under the Centers for Medicare and Medicaid Services (CMS) CY2025 Physician Fee Schedule (PFS), threaten not only the financial stability of healthcare providers but also patient access to essential services, particularly in rural and underserved areas.
Miller-Meeks emphasized that as a physician herself, she understands the strain these cuts would place on providers already struggling with rising operational costs and ongoing workforce shortages. “The overwhelming, bipartisan support is a testament to the importance of fixing this issue to preserve patient access to quality care," she said, calling for immediate intervention to mitigate the impact of these cuts. The letter to Congressional leadership echoes the concerns of healthcare organizations and advocates across the country who fear that reduced reimbursement rates will lead to diminished access to care, especially for Medicare beneficiaries.
“The overwhelming, bipartisan support is a testament to the importance of fixing this issue to preserve patient access to quality care.”
CTeL's Advocacy on Telehealth Reimbursement
As the debate over the Physician Fee Schedule intensifies, the Center for Telehealth and e-Health Law (CTeL) has voiced strong opposition to the proposed cuts, particularly their impact on telehealth reimbursement. In its comments submitted to CMS regarding the CY2025 Physician Fee Schedule proposed rule, CTeL warned that the expiration of telehealth reimbursement flexibilities could exacerbate Medicare spending and result in payment cuts far greater than the proposed 2.8%.
CTeL’s research has demonstrated that access to telehealth services provides significant cost savings in the long term by reducing hospitalizations and managing chronic diseases more effectively. The organization's 2021 report, "Cost Benefit Analysis of Telehealth: March 2020 – September 2020," highlighted that in Florida alone, telehealth access during the study period resulted in over $33 million in savings for Medicare patients with neoplasm diagnoses. Similar savings were observed in other states, with urban areas like New York City seeing a 50% reduction in Medicare spending for circulatory diseases due to improved disease management via telehealth.
“The organization’s 2021 report, “Cost Benefit Analysis of Telehealth: March 2020 – September 2020,” highlighted that in Florida alone, telehealth access during the study period resulted in over $33 million in savings for Medicare patients with neoplasm diagnoses”
CTeL’s analysis aligns with broader concerns voiced by Miller-Meeks and other healthcare advocates: limiting access to telehealth services will result in higher long-term costs, primarily due to an increase in preventable hospitalizations. Without the telehealth reimbursement waivers introduced during the COVID-19 pandemic, providers may find it financially unsustainable to continue offering telehealth services, despite the clear benefits they offer in improving patient outcomes and reducing overall system costs.
The Broader Legislative Context
Miller-Meeks' letter, which was co-signed by a bipartisan group of over 200 House members, urges Congressional leadership to pass legislative solutions that would not only prevent the 2.8% cuts from going into effect but also introduce long-term reforms to the broken Medicare payment system. Over the past five years, CMS has consistently issued regulations lowering payments to physicians and other clinicians treating Medicare patients. Although Congress has intervened to mitigate portions of these cuts, the PFS’s inherent flaws have created a cycle of instability in physician reimbursement rates.
The American Medical Association (AMA) has been a vocal critic of these continued cuts, with AMA President Bruce A. Scott, M.D., emphasizing that the “unsustainable onslaught of annual cuts must cease.” He lauded the bipartisan support garnered by Miller-Meeks and her colleagues, calling for immediate Congressional action to “Fix Medicare STAT!” Similarly, the American Medical Group Association (AMGA) has expressed concern over the impact of these cuts on community health, particularly in rural areas where independent practices are often the only source of medical care. The AMGA praised Miller-Meeks and her colleagues for their leadership in opposing the cuts, noting that Congress must act swiftly to prevent them from going into effect.
The Future of Telehealth: A Key Legislative Priority
At the heart of this debate is the future of telehealth and its role in the U.S. healthcare system. CTeL has made it clear that telehealth services are a cost-saving measure that improves access to care, reduces hospitalizations, and enables better chronic disease management. Yet, under the current CMS proposals, reimbursement for telehealth services will be reduced, limiting patient access and increasing healthcare costs in the long run.
CTeL's research debunks common misconceptions about telehealth, such as the belief that it leads to over-utilization. In fact, telehealth services replace in-person visits rather than adding unnecessary new services. Telehealth also reduces patient no-shows, enabling better disease management and compliance. Concerns over fraud in telehealth have also proven to be unfounded, as telehealth services are no more prone to fraudulent activities than in-person care.
Despite these benefits, the expiration of telehealth reimbursement flexibilities could reverse much of the progress made during the COVID-19 pandemic. Without Congressional intervention, the 2.8% reimbursement cut, combined with reduced access to telehealth, would likely lead to an increase in costly hospitalizations and reduced quality of care for Medicare beneficiaries.
Congress Must Act: Permanent Solutions for Medicare Reimbursement
The bipartisan letter led by Miller-Meeks calls for long-term solutions to the systemic issues plaguing Medicare payment rates. Specifically, it urges Congress to pass legislation that provides physicians and other clinicians with a permanent, inflationary update to Medicare payments, equivalent to the Medicare Economic Index (MEI). The letter also proposes targeted reforms to the budget neutrality requirements of the PFS, which have contributed to the ongoing reimbursement cuts.
These proposed reforms would provide much-needed stability for healthcare providers, particularly those in rural and underserved areas, where the financial impact of reimbursement cuts is most severe. By enacting permanent solutions to the flaws in the PFS, Congress can ensure that Medicare beneficiaries continue to have access to high-quality, affordable care.
A Call to Prioritize Telehealth
As CTeL has consistently advocated, telehealth must remain a key component of any legislative solution to the Medicare payment crisis. The long-term cost savings and improved patient outcomes associated with telehealth are too significant to ignore. CTeL calls on Congressional leadership to prioritize the extension of telehealth reimbursement waivers before the end of 2024 to secure a more sustainable future for both providers and patients.
The stakes are high: without immediate action, Medicare providers could face yet another year of damaging cuts, threatening patient access to care and the financial viability of independent practices. Congress must act swiftly to prevent these cuts from taking effect and ensure that telehealth remains a cost-effective and accessible option for all Medicare beneficiaries.
References:
U.S. Representative Mariannette Miller-Meeks' Letter to House Leadership, 2024, accessed via https://millermeeks.house.gov/sites/evo-subsites/millermeeks.house.gov/files/evo-media-document/Doc%20Letter.pdf
Center for Telehealth and e-Health Law (CTeL), “Cost Benefit Analysis of Telehealth: March 2020 – September 2020.”, www.ctel.org
American Medical Association (AMA), Statement by Bruce A. Scott, M.D., 2024.
American Medical Group Association (AMGA), Statement by Jerry Penso, M.D., M.B.A., 2024.