Medicare — A Broken Reimbursement System Means More Unacceptable Cuts
by Louis J. Wilson, MD, FACG
Chair, Legislative & Public Policy Council
Wichita Falls Gastroenterology Associates
Wichita Falls, TX
Medicare reimbursements are, yet again, under threat of destructive and unreasonable cuts. Once again, these cuts are due to an antiquated and broken Medicare reimbursement system and budgeting rules. The ACG Legislative & Public Policy Council has been sounding the alarm over these issues to Congress during the 2022 ACG Advocacy Day, and during my briefings with the U.S. House of Representatives’ “Doctors Caucus.” Make no mistake, these cuts are dangerous to patients, anti-physician practice, and must be changed. It’s time for ACG members to act. We will help lead the way for clinical GI and will also strongly encourage other professional associations to make stronger efforts for both a short-term patch, but also a long-term solution, that fixes this system. Our practices and patients are depending on us.
Why is this important?
The system is breaking. Inadequate reimbursement has already taken a major toll on the medical practices that our patients depend upon for access to care. According to a recent report published by the Physicians Advocacy Institute and consulting firm Avalere, approximately 108,700 physicians have shifted to employment (i.e., leaving private practice) since January 2019. This growth is almost evenly split between hospitals (58,200 physicians) and corporate entities (50,500 physicians). Of these physicians shifting to employment, about 76% (83,000 physicians) did so since the COVID-19 pandemic began. While unacceptable administrative burdens are a part of these trends, inadequate reimbursement is at least as important. According to Becker’s ASC, hospitals and corporate entities now own over half of physician practices, with hospitals owning approximately 26.4% and corporate entities owning approximately 27.2%. Of note, the percentage of corporate-owned practices (i.e., private equity firms) has increased 86% over the past 3 years.
We all know the factors driving this physician employment and practice consolidation:
- Declining reimbursement (especially when taking into account the effect of high inflation!)
- Rapidly rising costs and administrative burdens of maintaining a private practice
- Business, organizational, and administrative challenges for us professionals who are trained to focus on delivering quality patient care, not to operate businesses
- Mental health, burnout, and stress
What is Medicare’s response to these threats? More cuts!
The 2023 proposed Medicare physician fee schedule (PFS) represents a decrease of over 4% from 2022! Congressional budget rules could incrementally further deepen these cuts. These cuts represent a destructive blow to every medical practice that depends on Medicare. Commercial payors may soon be next.
The proposed update is based on two factors: Remember MACRA/MIPS, the law that requires us to report measures or face reimbursement cuts? Well, it also contains a statutory 0% annual update scheduled for next year. The “funding patch” passed by Congress at the end of 2021 partially mitigated 3.75% and staved off other cuts, but only thorough 2022. Cuts are looming in 2023 as our financial and operational pressures continue to pile up.
Alarm Bells Are Ringing. How will ACG respond?
We must fight these damaging cuts and demand more permanent solutions. The ACG Legislative & Public Policy Council, the Board of Governors, and ACG National Affairs Action Network has been active throughout the year, educating Congress on this issue, and will increase our efforts across the board. We also need more members, like you, to get involved. Click here to join! In the upcoming weeks, I will be providing regular updates on our meetings with Congress and ways you can get involved. We need to show them just how antiquated and broken this reimbursement is to us. We will do this not only for our medical practices, but for the patients and communities we serve.