Meaningful Medicare reform unlikely in 2024

Ongoing ACR advocacy and political hurdles

Medicare reform remains at the forefront of ACR's advocacy efforts, but Smetherman acknowledged the challenges posed by the current political climate, suggesting that substantial progress is unlikely until after the election. 

"With all that is going on in U.S. politics, I don't think there's going to be a whole lot of attention paid to healthcare reform," she stated.

Smetherman noted that the ACR's advocacy team is closely monitoring the positions of key political figures, including Kamala Harris, the likely Democratic nominee for president. Harris, who has a background in healthcare equity and access, and was the artificial intelligence czar under President Biden, could play a crucial role in shaping future policies.

Medicare plans to cut physician pay again in 2025

The recent release of the Medicare draft 2025 Physician Fee Schedule has raised concerns among healthcare providers. Smetherman pointed out that while the ACR and other societies have successfully mitigated some cuts in the past with last-minute changes to the medicare conversion factor, the long-term sustainability of the system remains in question. 

"The conversion factor again is down. We and other societies have been successful in mitigating that, but the long-term sustainability of not having any kind of an economic adjustment based on cost of living over so many years... it is not sustainable," Smetherman said.

The Centers for Medicare and Medicaid Services has a Congressional mandate to balance its budget and any changes in its payment schedule need to maintain budget neutrality. If reimbursements are increased in one area as an incentive, cuts need to be made someplace else to balance the budget. This often comes from cuts to physician payments. CMS also has failed to offer any inflationary increase to physicians, and rising costs for staffing, equipment and supplies are not offset in what Medicare pays, which compounds the impact of annual fee schedule cuts. 

The American Medical Association says, adjusted for inflation in practice costs, Medicare physician payments have declined by 29% overall between 2001 and 2024.  

Smetherman highlighted that other countries with national healthcare systems are experiencing similar challenges, emphasizing the global nature of the issue.

Medicare reimbursement cuts may impact patient care

Addressing the potential consequences of continued Medicare cuts, Smetherman warned that patient access to care could be significantly affected. She cited instances where providers in some communities feel they cannot cover their costs with Medicare and Medicaid patients. 

Part of the issue of rising costs for Medicare relate to the expanding number of patients who are seeking care as baby boomers get older and due to programs that have expanded coverage to more people.

"In states like ours where we had the Medicaid expansion, it is absolutely a major problem," she said.

Smetherman acknowledged that some smaller practices might already be turning away Medicare patients due to financial constraints. "It is definitely a challenge, especially for smaller practices to be able to get the care that they need," she noted.

Healthcare workforce challenges compound costs as staffing becomes more expensive

Inflation impacts practice costs, but this have been compound by rapidly rising staffing costs. Doing the pandemic, more than half of clinician reported experiencing burnout, and many left clinical practice. This exacerbated an already growing shortage of radiologists impacted nurses and technologists as well. 

Smetherman said particularly in nursing and with radiologic technologists, the shortage opened new opportunities where many become travel technologists to help plug holes at healthcare centers facing staffing issues. She said the could a great deal more as travel techs or nurses than if they were employed in a healthcare system or in an office. This issue has forced some practices to increase pay for the staff they retained and to attract new hires.  

While Medicare payments generally remain static or decline, that has not the case with staffing costs. "In the healthcare staffing industry, it's definitely the free market," Smetherman said.

In addition to workforce shortages, administrative burdens on physicians have added to clinician burnout. Smetherman referred to these administrative challenges as "administrative harm," where radiologists and other physicians and their staffs spend a large amounts of time entering or searching for data in electronic medical records, or deal with a rapidly growing number of prior authorization requirements. This increasing amount of non-clinical work means they spend less time caring for patients.

She said ACR advocacy efforts in Congress include trying to reduce the number of prior authorizations. While the 2024 Physician Fee Schedule eliminated the administrative burden requirement for appropriate use criteria (AUC) documentation to justify payments for advanced imaging tests, Smetherman said AUC documentation might actually be a way forward to reduce the number of prior authorizations.