Physicians who participate in the Medicare program face growing economic challenges due to a confluence of uncertainties from the pandemic, Medicare payment cuts, lack of inflationary updates, and significant administrative barriers. Adjusted for inflation, Medicare physician payments have decreased by 22% since 2001. Physicians are experiencing a 2% cut in Medicare payments in 2023 and will face at least a 1.25% cut in 2024 — and many specialties will face even deeper cuts. Continued erosion of Medicare payments to physicians will force many doctors to make tough decisions — potentially limiting seniors’ access to care and drastically impacting initiatives to support healthcare for rural and underserved communities.
Looming Cuts to Medicare
As physicians face uncertainty about the financial viability of their practices due to low Medicare reimbursements, physician participation in Medicare is declining. Just 65% of physicians will accept new Medicare or Medicaid patients and continue to treat their current patients, according to Medscape’s 2023 Physician Compensation Report. Congress has repeatedly acted to protect providers, but a long-term solution is essential. Physicians are currently facing cuts of:
- 4% — from the Statutory PAYGO sequester
- 1.25% — from a phasing-out bonus to Medicare reimbursements designed to offset changes to E/M codes
- Up to 10% — for certain specialties due to changes in E/M codes
- More than 20% — for certain specialties due to changes in CMS’ clinical labor pricing formula
- In addition, Medicare reimbursement payments do not account for inflation, leaving physicians behind as practice costs rise
Congress Should Act Today to Fix the Broken Medicare Physician Reimbursement System
Every year, physicians are faced with the uncertainty that Congress will allow substantial cuts to Medicare reimbursement payments. In addition, budget neutrality constraints imposed by Congress have created a zero-sum game — when some specialties benefit, others suffer. Combined with incredibly high rates of physician burnout, America is facing an unprecedented exodus of physicians from the field and of those who do remain, many are consolidating their practices, reducing access for patients.
H.R. 2474, introduced by Reps. Raul Ruiz, M.D. (D-CA), Larry Bucshon, M.D. (R-IN), Ami Bera, M.D. (D-CA), and Mariannette Miller-Meeks, M.D. (R-IA), offers a long-term solution for physicians and patients.
The bill would create a single conversion factor for Medicare reimbursement payments based on the Medicare Economic Index, which measures the yearly increase in practice costs for physicians.
A yearly inflation-based payment adjustment for physicians would bring them to par with other Medicare providers and help turn the tide of declining participation in Medicare. Importantly, this would benefit rural and underserved communities which suffer the most when doctors leave the Medicare program.