August 21, 2025
McKnight's Long-Term Care News
It took a little while for the dust to settle after the Centers for Medicare & Medicaid Services proposed its 2026 Physician Pay Rule.
But now that it has, physician advocates are kicking up a storm over an unexpected proposal that would cut Medicare Part B indirect practice expense payments in half — but only for “facility-based” practitioners.
The result would be pay cuts of as much as 8% and involve many of the most often used codes. CMS has argued that more physicians are in larger practices and don’t carry overhead costs as high as they once did so reductions are in order.
It’s a false argument created by an administration looking too hard for “efficiencies,” said Alex Bardakh, PALTmed’s Senior Director of Advocacy and Partnerships, in an interview with McKnight’s Long-Term Care News on Wednesday.
Care costs themselves have not declined, he noted. On the contrary, some physicians may be facing higher driving and fuel payouts, for example, while visiting multiple facilities in a day — and still have staff and their own office overhead to support.
“This is a very urgent issue, as urgent as it’s ever been,” Bardakh said.
Pay changes galore
A policy brief from the Post-Acute Long-Term Care Medical Association (PALTmed) illustrated stark changes that could occur from the proposed 50% cut to indirect practice expenses, which would hit only some clinicians.
CPT code 99309, for example, the most commonly used in nursing homes, would trigger a pay cut of about 6% for short-stay skilled nursing services. However, if the care setting is deemed “non-facility” — which might simply reflect care delivered in a long-term care unit — pay for the same service could rise by 10%.
The skilled part of a building draws Code 31, and it’s considered a “facility.” However, if a person is not on the skilled side — either because they don’t qualify or they’ve used up their 100 days — they get the Code 32 designation, which depicts long-stay, or “non-facility” status.
“Because you’re reducing the practice expense by 50%, it’s a significant loss,” Bardakh noted. “Even with this year’s 2.5% increase [starting Jan. 1, 2026], last year it was a 2.7% loss, so it’s offset.”
He said the “arbitrary” 50% payment reduction shows that regulators clearly need to better “understand our world” and how the work flows in post-acute care.
Action plans
Stakeholders have until Sept. 12 to submit comments to CMS on the proposed rule, which was issued in mid-July.
“We have to make the argument that clinicians’ practices in this space have costs that haven’t changed. Any arbitrary type 50% cut … what is that based on? It doesn’t make any sense.”
LTC physicians could argue that gas prices and other key items have risen in price due to inflation.
Bardakh said the threat of harm is real if such pay cuts occur and ultimately chase practitioners from the field. He cited past studies that have found greater physician presence leads to reduced rehospitalizations, improved quality care and lowered fall risks.
“It’s provable. You look at value-based care and see the increased presence of clinicians in these buildings and the positive effects it will have on quality, and on savings,” he said. “You’re talking about the value of whatever that visit is. Compared to the savings of rehospitalizations, you’re talking about a drop in a bucket.”
Getting pounded
He said that a forceful show of comments could make a difference, and that attending physicians and those who work with them should not be shy about promoting their niche.
“We’re trying to make sure we are not viewed as [small or insignificant]. We serve one of the costliest populations with regard to Medicare dollars, so these kinds of policies have a tremendous impact on Medicare savings and quality of life,” Bardakh said.
He urged all interested parties to submit comments to CMS. PALTmed can assist anyone who needs guidance or assistance, he added. Other medical associations are expected to submit critical comments, but a greater quantity of submissions is desired and more likely to make a difference, Bardakh said.
He added that the rule is far from being in final form, noting that CMS actually asks commenters to make suggestions about how high the cut should be if they think 50% is too much.
“I think [the proposal] was just hastily done,” he said, “with the attitude of, ‘Let’s try to overcorrect the system with a sledgehammer’ approach.”