Every year about this time, press releases from physician groups, state medical associations, and specialty societies echo a refrain: Doctors aren’t getting paid enough by Medicare. Either the latest pay bump wasn’t enough, or it’s a cut that’s way too steep.
This year, however, their complaints have a much more desperate tone.
Physicians across the country say they are facing a serious one-two punch of cuts which — if Congress doesn’t step in soon — will mean a reduction of 8.47% in their claims for taking care of the nation’s Medicare beneficiaries starting January 1.
“Things are different this year,” Jack Resneck Jr., MD, president of the American Medical Association (AMA), told MedPage Today. To impose cuts at this time, “3 years into a pandemic … and with burnout rates soaring from about 38% in 2020 to 63% in 2021, and one in five physicians saying they’re going to retire or do something else in the next 2 years” is, he noted, “unconscionable.”
Practices are facing healthcare staffing and medical supply shortages, inflation of 7% to 8%, and 10,000-plus patients becoming Medicare-eligible every day. There’s a “tripledemic” anticipated this winter. On top of all that, Resneck said, the cuts are creating an “unprecedented challenge” and “a perfect storm” that he predicts will have “a devastating impact on seniors’ health.”
“It’s just really dangerous and incredibly difficult. [Physicians] are faced with difficult choices about selling their practices,” he added. And with many of the nation’s physicians now over the age of 65, there aren’t enough residency training positions to feed the pipeline to replace them, he said.
Recently, the AMA has proposed a multi-pronged solution to fixing the problems, called the AMA Recovery Plan for America’s Physicians.
Last month, the California Medical Association (CMA) posted its annual notice to remind physicians that if they want to change their Medicare participation status, the deadline to opt-out is December 31.
This year, however, the CMA notice had a different second paragraph that sounded like a warning or even — as some suggested — a subtle threat. “Physicians should be aware that the Centers for Medicare & Medicaid Services (CMS) recently released the final rule and policies for next year,” it states. “Unless Congress acts by the end of the year, physicians are again facing substantial Medicare payment cuts in 2023 due to a confluence of statutory and budget neutrality payment cuts,” which the CMA is urging Congress to stop.
“As always, physicians have three choices regarding Medicare: Be a participating provider; be a non-participating provider; or opt out of Medicare entirely,” the notice continued.
The looming pay cut is actually two cuts. The first, at 4.47%, reflected in the 2023 Physician Fee Schedule, stems from a policy change several years ago that increased payments for physicians who submitted claims for services involving evaluation and management of patients — so-called E&M codes — as opposed to procedural services. The Medicare Physician Fee Schedule must be budget-neutral, so if one group of doctors who perform E&M services gets paid more, another group that performs different services gets paid less.
Lawmakers ultimately found the money to forestall the cuts that would have come in later years, until now. But for 2023, with a lame-duck Congress, nothing has been passed, although Resneck and others hope that H.R.8800, the Supporting Medicare Providers Act of 2022, will alleviate this part of the cut.
The other cut, amounting to 4%, comes from a complicated statutory rule called the PAYGO sequester. Doctors hope Congress will find a way to reduce this cut as well.
In Texas, as well as many other states, some private-practice physicians are barely hanging on after last year’s round of cuts, and some nearing retirement are reconsidering their future, including Houston-area ophthalmologist Kathleen Archer, MD, who specializes in oculofacial plastic and reconstructive surgery.
She lamented how Medicare’s reimbursement for the supplies and services she needs barely keeps up with her costs in treating patients with migraine or facial spasms. For each vial of Botox, for example, Medicare pays her $23.20 less than what it costs her, and that’s just one of many examples.
“If they go ahead with [the proposed] 8.5% reduction, it’ll be at the point that I’m losing money,” she said. That, and her constant battles with insurance companies, has put her on the verge of thinking it’s not worth it to continue. “I’m coming up on 68 years old … and I know doctors my age — some older and some a little bit younger — are basically saying, ‘I just can’t put up with this anymore.’ They’re leaving medicine.”
With doctors — especially those who are older — leaving medicine without replacements, the country will soon be faced with a shortage of doctors who will see Medicare patients.
Some doctors are putting caps on the number of beneficiaries they will accept in their panels, and many are now telling long-standing patients to find another physician. Some physicians said they are already seeing this happen to members of their own family.
One California physician said his wife, who recently turned 65 and needed to get a pap smear, has been turned away by four ob/gyn physicians who said they’re just not accepting new traditional fee-for-service Medicare patients, which he called scary.
In New York, neurologist David Podwall, MD, president of the Nassau County Medical Society, finds it ironic. “At a time where we have this huge need for physicians, you try to call any doctor’s office and you’ll find a huge wait — all across the country, and this [cut] is not going to make that any better.”
“A lot of physicians are going to decide that this is the time to close up shop. Retire. And we already saw a lot of that during COVID,” he added. “I think we’re feeling beaten down. Everyone has had a tough time during COVID. Cutting their pay by 8.5%, that’s not exactly the way you thank the people who stepped up.”
Other sectors in the healthcare industry, such as hospitals and nursing homes, have gotten pay increases. “But the only group that’s getting cut in healthcare is the physicians,” Podwall said.
Restructure the System?
Doctors interviewed by MedPage Today want the entire structure of how physicians get paid to change. Rates now have nothing to do with the value of the medical services provided, but by obscure policies and budget formulas bound by conversion factors, sequestration rules, and PAYGO, they said.
“Every year, it’s like this mishmash of factors that determine what Medicare pays physicians,” Podwall said. “A business will say, ‘I’m going to pay you based on the value of what you provide.’ But that’s not part of these [physician payment] equations. They’re based on things that have nothing to do with medicine, like sequestration.”
Gary Floyd, MD, president of the Texas Medical Association, said these proposed cuts “couldn’t come at a worse time. Doctors are just now coming out of the pandemic, when office visits were way down. A lot of physicians had to dip into their own private funds to keep their offices running and keep their employees paid, and buy personal protective equipment,” which costs more than what federal relief funds provided.
The Medicare payment system “is totally messed up” and needs a total overhaul, Floyd said. “Hospitals, insurance companies, the government makes an adjustment for inflation … Physicians face the same thing … and yet they cut our revenue.”
“Every year, we have begged, and Congress has found monies to put in the budget to forego that. And we’re hoping that will be the case this time,” he added.