The Centers for Medicare and Medicaid Service (CMS) has released its Medicare physician fee schedule proposed rule for 2023 with an additional 4.42% cut to physician payments. The proposal comes as inflation and the cost of running an independent practice continues to rise.
When you combine the CMS trends with inflation trends, the connection between the two continues to widen.
CMS bases its reimbursement rates on a conversion factor per RVU (Relative Value Unit). The history of Medicare Conversion Factors has remained relatively flat over the last 20+ years despite the inflation we have in this country year over year.
Here is a side-by-side comparison of the two:
Historically, the Medicare and private insurance fee schedules have reduced over time compared to cost-of-living increases and overall medical expenses.
Many providers and experts will agree Medicare does not represent fair market value on reimbursement. This is because the amounts paid under Medicare are determined based on budgetary considerations on an annual basis and are non-negotiable, removing them from consideration as fair market value.
With lower reimbursement rates, the proposed amount could lead to fewer Medicare patients seen by physicians. And as a result, those patients would experience longer wait times for appointments and reduced access to care.
Additionally, most private insurers use CMS reimbursement rates to set their contractual rates, so the impacts of this proposal have a far greater reach than Medicare or Medicaid.
Patients’ quality of care could decline as physicians struggle to find additional funds to invest in new technology and keep up with the latest medical research.
Why do we expect physicians to continue to see flat or declining reimbursement when the cost of running a practice continues to rise, not to mention all the additional administrative burdens the practices must complete to qualify for CMS reimbursement rates?
We are essentially asking our providers to work smarter for less money.
If these cuts are finalized, they will significantly impact physicians, especially those already struggling to keep their practices afloat. In addition, the proposed amount will disproportionately impact small and rural practices, which are already struggling to keep up with the rising operating costs.
The reduction in payments will make it even harder for physicians to cover their costs and force many to consider other options like closing a practice or moving under hospital employment. This would be devastating for patients who rely on these physicians for their care and create a ripple effect on the healthcare system as a whole.
In reality, that ripple has already started.
Dr. Andy Indresano, an orthopedic spine surgeon at DISC Spine Institute in Dallas, does not currently see Medicare or Medicaid patients because the current physician fee schedule is already cost-prohibitive.
“There comes the point when having a private practice is no longer viable. These cuts don’t just impact Medicare patients because private insurers base their rates on the fee schedule as well,” said Indresano.
Dr. Indresano is not alone.
A survey by the Texas Medical Association (TMA) revealed that 62% of physicians in the state said additional Medicare payment cuts could force them to stop seeing any new Medicare patients, while 42% said they might have to stop seeing even their existing Medicare patients.
In addition, 59% of the TMA survey respondents said they might opt out of Medicare entirely, and 43% may consider retirement.
“In the past 8 month I have seen two private practices close due to decreasing reimbursement and increased administrative costs. I have also seen a spine and neurosurgery practice stop seeing Medicare patients.”
The proposed CMS physician fee cut for 2023 is a significant concern for physicians and patients when doctors can no longer serve their community’s needs.
We at Veritas Experts encourage physicians and patients to speak out and urge Congress to reject this proposed cut and take more steps toward ensuring everyone has access to the high-quality care they deserve.
Public comments on the CMS 2023 Physician Fee Schedule remain open until 5 pm on September 6, 2022. Submit comments electronically HERE.
Update as of September 27, 2022:
The open comment period for the proposed CMS Physician Fee Schedule closed on September 6, 2022.
New legislation introduced in the House aims to avert an incoming proposed cut to Medicare physician payments set to go into effect on January 1, 2023.
The bill, sponsored by Reps. Larry Bucshon, M.D., R-Indiana, and Ami Bera, M.D., D-California, would raise Medicare’s conversion factor to calculate physician payments by 4.42 percent.
The aim is to prevent another cut in the conversion factor in the fee schedule so that all payments are budget neutral.