Issues & Insights

Doctor, Fix Thyself

We owe a lot to America’s physicians, the brave men, and women on the front lines of the war against COVID-19. Yet rather than supporting American doctors, flawed public policy will soon reduce Medicare’s physician fee schedule, compounding and magnifying the increased pandemic pressures and economic challenges that physicians have been facing over the past two-and-a-half years.

Current federal policies call for a 4.42% cut in Medicare physician fee schedule payments, effective Jan. 1, 2023. Such drastic cuts for our nation’s physicians will force many small to mid-size practices out of business — particularly those in rural communities — placing an increased, and deeply unfair, financial strain on the ones that remain. The result is entirely predictable, a weakened health care system that endangers the lives of vulnerable patients. Proposed reductions to Medicare’s physician payments will undermine the economic viability of practicing medicine in towns and cities nationwide, and further broaden the health care equity gap for both rural America and lower income communities of color.

These fast-approaching ill-considered cuts magnify the insidious instability of Medicare’s arcane and antiquated physician payment system For quite some time the growing discrepancy between the cost of running a medical practice and the actual payments physicians receive from Uncle Sam through Medicare has become more and more unreasonable and unjustifiable, considering the various administrative red tape and financial burdens of participating in the program. This situation is driving provider consolidation that limits patient choice not just in access to physicians, but in the type of care those remaining physicians can provide.

Inexplicably, American’s physicians are the only group of Medicare providers who will not receive an upward inflationary correction in 2023. Thanks to obscure legislative language, other Medicare providers — including skilled nursing facilities, inpatient and outpatient hospitals, and hospices — will all receive payment increases that more accurately account for the rising cost of care while physicians physician reimbursement rates are cut. What’s wrong with this picture? 

According to data from the American Medical Association, inflation-adjusted Medicare physician payments fell 22% from 2001 to 2021. To make matters worse, a statutory freeze in annual Medicare physician payments is in place until 2026, at which point increases will resume at a rate of 0.25% annually, far below inflation rates.

Without congressional action, a patient’s access to a physician’s care faces an uncertain future. Fortunately, there are some in Congress who understand the dangers of this looming crisis and have put forward a potential solution.

Representatives Larry Bucshon, R-Ind., and Ami Bera, D-Calif., both of them doctors, have introduced bipartisan legislation in the House — H.R. 8800, the “Support Medicare Providers Act” — that would help address some of the flaws in Medicare’s physician payment system and delay the proposed 4.42% cut for at least a year. Albeit a temporary Band-Aid to a much large problem, politics is the art of the possible. H.R. 8800 would provide at least temporary relief for physicians during a time of record inflation while allowing Congress more time to come up with a sustainable long-term policy solution.

Of course, it’s unfair to practitioners and patients alike to keep moving from one provisional makeshift “doc fix” to another. It’s time for Congress to seriously – and expeditiously – address the Medicare problem. H.R. 8800 offers a good starting point before scheduled cuts threaten physician practices and patient access across the country. Banging pots is nice, but it doesn’t keep the lights on in medical offices across the country.

Peter J. Pitts, a former FDA associate commissioner and member of the United States Senior Executive Service, is president of the Center for Medicine in the Public Interest and a visiting professor at the University of Paris School of Medicine.

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  • The elephant in the room is that Medicare was implemented when people died, on average, in their 60’s. Now it is the late 70’s which is the time that more things break down and medical care becomes more common and more expensive. At the time of its implementation there were many against it as unsustainable given those type of considerations. Passing the burden on to Doctors, while politically expedient, will ultimately fail as more and more opt out. Even before these cuts, Medicare is only covering Doctors overhead -nothing more.

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