New Legislation Introduced to Improve the Medicare Physician Fee Schedule

December 4, 2023 – On December 1st, a new bipartisan legislation, the Physician Fee Schedule Update and Improvements Act, H.R. 6545, was introduced in the House to make improvements to the physician fee schedule under the Medicare program will be part of the House Energy and Commerce Committee markup this week.

The bill includes the following provisions:

• Extending floor for work geographic index from January 20, 2024 to January 1, 2025;
• Increasing support for physicians and other practitioners in adjusting to Medicare payment changes by changing the add-on adjustment from 1.25% to 3.0%;
• Extending incentive payments for participation in eligible alternative payment models;
• Updating the budget neutrality threshold from $20 million to $53 million for 2025 and providing an inflationary adjustment for 2030 and every five years thereafter; and
• Timely updates (at least every five years) to direct costs used to calculate practice expense RVUs including consultation with physician specialty societies.

Available Resources

• HR 6545 Physician Fee Schedule and Improvements Act