Medicare’s broken pay formula threatens pathologists again  

Nearly everyone agrees Medicare’s payment system for physicians is broken. After years of Medicare cuts and temporary mitigating fixes by Congress, physicians face more decreases to the services they provide to seniors next year.  

Without additional relief, pathologists will receive a Medicare cut of 6.5 percent in 2024 despite the steadily increasing value of accurate and reliable diagnoses and clinical laboratory test results to patients. The reduction stems from a complex set of budgetary rules and systemic flaws within the Medicare physician fee schedule that, unless addressed, will continue to plague physicians for years to come. These include the budget-neutrality requirement for Medicare mandating that any increase for certain physician services must be offset by cuts elsewhere.  

Congress needs to act with short- and long-term measures to stabilize Medicare’s fee schedule and protect access to services by physicians in rural and urban settings.  

Margins at physician practices are extremely thin as inflationary pressures have increased costs in all sectors of the economy, including health care. Future cuts to Medicare reimbursement will only threaten the ability for some practices to stay open if rising costs exceed revenue.  

We have seen pressures faced by pathologists and the rest of the laboratory workforce increase throughout the pandemic. For pathologists, we are unique as our work touches every aspect of the health care continuum as we are the ones who diagnose the disease that patients are facing. 

According to an American Medical Association analysis of Medicare data, when adjusted for inflation, payments to physicians have declined by 22 percent from 2001–2021. While Congress has taken action to address some of these fiscal challenges by mitigating some of the cuts, overall payment continues to decline. 

Financial challenges, administrative burdens, and staff shortages, combined with outdated Medicare payment policies, make it more difficult for physicians to maintain their practices and serve their communities. Many state Medicaid agencies, managed-care plans, and private payers base their payment rates on Medicare’s fees. Low Medicare payment rates translate to insufficient payment rates across multiple payers nationwide. 

It’s critical that this problem be addressed and that we invest in ensuring a physician workforce ready to care for the next generation. We can’t simply shift funding and neglect a broken system producing cuts year-after-year. 

Simply put, Congress must pass legislation to provide additional relief from the Medicare cuts scheduled to take effect in 2024. This desperately needed pay fix, albeit a temporary one, will help provide crucial short-term financial stability until permanent, bipartisan payment reforms are enacted. The call to action is clear: Congress must take action to protect patients’ access to care by halting the payment cuts that will take effect in January. 

Emily E. Volk, MD, FCAP, is president of the College of American Pathologists.