President Biden has signed a $460 billion spending bill, marking a significant step forward for healthcare in the United States. This latest agreement addresses critical concerns within the healthcare sector, particularly regarding physician compensation and hospital funding.

The bill includes provisions aimed at mitigating the impact of the 2024 Medicare Physician Fee Schedule final rule, which initially proposed a 3.37% decrease in doctor pay. To counteract this, a 1.68% pay bump has been approved, although still falling short of offsetting the full decrease outlined in the final rule.

Furthermore, the hospital sector is likely to benefit from the increased inpatient payment adjustment for low-volume hospitals and the Medicare-dependent Hospital program, ensuring continued support for these vital healthcare institutions. Despite widespread support and opportunities to block these cuts, Congress has opted to reverse only a portion of the reduction.

While this spending bill represents a significant step forward for healthcare, there remains work to be done to ensure the stability and sustainability of Medicare payment systems.

Jesse Ehrenfeld, M.D., president of the American Medical Association (AMA), expressed disappointment with the bill’s outcome. “The need to stop the annual pay cycle of pay cuts and patches and enact permanent Medicare payment reforms could not be more clear.”

The 1.68% rise in MPFS payments will take effect from March 9, 2024, through January 1, 2025.