Physicians face cuts to Medicare payments if Congress doesn’t act

As physicians whose practices run the gamut from primary care to surgery, we hear daily stories from our patients about how difficult it is to access high-quality health care. In particular, as the COVID-19 pandemic exposed the fragile state of our nation’s health care system, patients increasingly experienced lengthy delays in their efforts to receive essential services, from preventive visits to major surgeries. Physician practices are being merged or closed, and those offices that can remain open cannot provide adequate staffing.

According to a survey conducted by the Medical Group Management Association (MGMA) in September 2021, 73% of healthcare facilities reported that staffing will be the pandemic’s biggest challenge in 2022, leading to a gap between our healthcare system and patient access. This resulted in long waiting times and delays in treatment. In addition, lack of access to health care disproportionately affects the most vulnerable members of our society, many of whom already face health equity issues. A study from August this year found that the majority of those who delayed treatment in the US in 2021 reported that they had at least one pre-existing medical condition that could have been exacerbated by the delay in treatment.

What does it take to correct this worrying trend? Improved investment and prioritization of the workforce of physicians across America, as well as appropriate Medicare pay rates.

Over the past two decades, Medicare and Medicaid investments in physician services have remained stagnant or, in some cases, reduced. This is happening even though the cost of running a practice continues to rise substantially. This year’s MGMA study found that 90% of healthcare providers reported that costs are growing faster than revenues. The medical practice is unable to cope with inflation, which has reached its highest level in decades, not to mention the implementation of costly innovations to improve patient care.

We know this is true: Ongoing financial challenges, administrative burdens, and staff shortages, combined with outdated Medicare payment policies, make it difficult for physicians to maintain their practices and serve their communities. Many state Medicaid agencies, managed care plans, and private payers base their pay rates on the rates set in the Medicare Physician Price Schedule. Insufficient Medicare payment rates lead to insufficient payment rates among payers and patient groups. In contrast, other non-medical health areas are seeing large increases in payments and receiving positive Medicare updates reflecting rising costs.

The problems associated with this outdated policy will soon get worse. A total reduction in payments to doctors by almost 10% is scheduled for January 1, 2023. The cuts are due to a complex set of budgetary rules and systemic shortcomings in the Medicare doctor’s pay schedule that, if left unaddressed, will continue to plague. doctors for many years. These include the fiscal neutrality requirement for Medicare, which requires any increase in payment for certain doctor services to be offset by cuts elsewhere. The cuts are further exacerbated by the fact that Medicare physician pay rates are not adjusted for inflation, a problem that hospitals, skilled care facilities and other Medicare-paid organizations do not face.

Together, our teams represent over 370,000 physicians and we treat millions of patients each year. It is critical that this problem be addressed and we have invested in having a cadre of doctors ready to take care of the next generation. We cannot simply redistribute funding without addressing fundamental issues.

The call to action is clear: Congress must take action to protect patients’ access to care by halting payment cuts that will take effect in January. Legislators then need to provide annual positive payment updates that account for rising costs and move us toward a more sustainable Medicare payment system. Only then can we protect our practice and give patients the care they need and deserve.

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