Year End Federal Spending Package Includes Partial Reduction of Medicare Pay Cuts for 2023

Leaders in Congress have agreed on a $1.7 trillion federal spending package that includes a reduction of the Medicare pay cuts for doctors that were looming over 2023. President Biden signed the bill into law on Friday.

The bill will ease a scheduled 4.5 percent cut to the Medicare physician fee schedule in 2023. Instead, CMS will incrementally increase cuts over the next two years. Physicians will face a 2 percent pay cut in 2023, which will increase to 3.5 percent in 2024.

Significantly, the budget deal includes a postponement of the 4 percent cuts from the Pay-As-You-Go (PAYGO) sequester triggered by passage of the American Rescue Plan Act. Under the package, the additional cuts designed to ensure that federal spending doesn’t add to the deficit are blocked in 2023 and 2024.

The estimated updated anesthesia conversion factor (CF) for 2023 is $21.1249, a 2.03 percent cut from the 2022 anesthesia CF of $21.5623, but less than the 4.42 percent cut announced in the initial 2023 Medicare physician fee schedule final rule. The RBRVS CF will be approximately $33.8872, which represents a 2.08 percent cut from the 2022 CF of $34.6062. CMS will likely publish updated information on the final CF to implement these legislative changes in the coming days or weeks.