A 10% Cut to 2022 Physician Reimbursement?

Physicians and the medical billing industry have gotten used to annual debates and last-minute rescues to avoid across the board cuts to Medicare reimbursement. But 2022 physician reimbursement may “take the cake.” 

The bottom line: without intervention from Congress, Medicare’s 2022 physician reimbursement will be cut by 9.75% vs. 2021. How is this possible?

Pending Medicare Cuts to 2022 Physician Reimbursement

  1. Congress passed a one-time 3.75% increase in the Medicare Conversion Factor for 2021. It expires on December 31.
  2. A 2% sequester cut has been looming for seven years.
  3. An additional 4% “PAYGO” sequester cut is mandated based on 2021 spending for Covid relief. 

Congress May Act

Of course, Congress may step in and postpone or reduce these cuts. And that is exactly what a number of physician organizations are requesting. Note that the House has already passed legislation to waive the PAYGO requirement.

  • The AMA has written a letter to Congress requesting relief from all 3 items
    • In the letter, AMA said it is time for Congress to “reimagine the Medicare payment system and create a simpler, more understandable process that better serves patients and fairly compensates physicians.”
  • On September 13, the Association of American Medical Colleges submitted a letter to CMS to at least maintain the 3.75 percent increase for the next two years and prevent sequestration cuts in 2022.
  • MGMA is urging its members to write to Congress to maintain the 3.75% increase for 2022 and 2023.

Will 2022 Physician Reimbursement be Cut?

At this point, it is too early to know. Lobbying efforts are already underway and will increase in intensity. But Congress is not likely to take up these issues until very late in the year, at the earliest.

Most observers expect that some of these cuts will be averted. But it will not be as easy as previous years. Hold on for a bumpy ride.  


P.S. While it should affect many fewer physicians, it’s worth noting that potential penalties associated with the Merit-Based Incentive Payment System (MIPS) will go up to 9% next year.