Physician reimbursement for Medicare patients decreased 2.3% from 2005 to 2021 when accounting for inflation, according to new research out of the Harvey L. Neiman Health Policy Institute. Reimbursements actually increased during that time for some specialties, but cardiac surgery, thoracic surgery and cardiology all experienced significant declines.
The Medicare Physician Free Schedule and other Medicare programs are currently required to remain budget neutral, meaning increases in one area must be offset by decreases in another. To learn more about how this rule impacts specific specialties, researchers with the Neiman Institute explored aggregated data for 100% of Medicare Part B claims from 2005 to 2021. The group shared its full analysis in INQUIRY: The Journal of Health Care Organization, Provision, and Financing.[1]
“While the explicit purpose of statutory freezes and budget neutrality is to control Medicare spending, the question we explored is, how has utilization changed for services from various specialties and provider types?” wrote first author Eric W. Christensen, PhD, research director with the Neiman Institute, and colleagues. “It is expected that continued erosion of Medicare reimbursement will eventually become an access issue for Medicare beneficiaries.”
Christensen et al. found that 16 healthcare specialties experienced reimbursement declines from 2005 to 2021 when accounting for inflation. This included cardiology, cardiac surgery, thoracic surgery, radiology, psychiatry, urology, internal medicine and others. Cardiac surgery saw the most significant drop in reimbursements for Medicare patients (57.6%). Thoracic surgery reimbursements fell 41.5%, meanwhile, and cardiology reimbursements fell 29%.
Only three of those 16 specialties—general surgery, thoracic surgery and cardiac surgery—did so without also experiencing a rise in relative value units (RVUs).
The group also found that payments to nonphysicians—nurse practitioners, for example, jumped 206.5% from 2005 to 2021. Payments to limited-license physicians (16.3%) and medical suppliers (44.4%) are also on the rise.
What do these trends mean for physicians going forward? Joshua Hirsch, MD, vice chair of procedural services at Massachusetts General Hospital and a senior research fellow with the Neiman Institute, thinks the U.S. insurance marketplace could see a dramatic shift if budget neutrality policies remain in place.
“While reducing physician payments can help to contain Medicare expenditures, it may also lead to unintended consequences for patients” he said in a statement. “Continued decline of Medicare reimbursement relative to reimbursement by private insurance incentivizes providers to favor privately insured patients. Our study pinpoints the extent to which real decreases in reimbursement are occurring despite greater consumption of care. We hope this study will motivate policymakers to find a solution that inures to the benefit of the Medicare insured population who are at risk for diminishing access to care.”
Click here to read the full analysis in INQUIRY: The Journal of Health Care Organization, Provision, and Financing.
The Neiman Institute was founded by the American College of Radiology in 2012. Click here to learn more.
Michael has more than 16 years of experience as a professional writer and editor. He has written at length about cardiology, radiology, artificial intelligence and other key healthcare topics.