Even before inflation and the finalized pay cut for 2024 are factored in, Medicare physician payment has effectively declined 26% since 2001, according to the American Medical Association.
And the cuts are not likely to stop anytime soon — CMS proposed a 2.8% conversion factor reduction to its 2025 physician fee schedule earlier this month.
Some physicians, particularly in private practice, are dropping Medicare patients to increase profitability as practice costs soar.
This trend is not new. Five years ago, although 71% of physicians who participated in Medscape's "Physician Compensation Report" for 2018 said they would continue to treat Medicare and Medicaid patients, 16% indicated they were undecided.
But according to Medscape's 2023 survey, only 65% of physicians confirmed they would continue to treat and take new Medicare and Medicaid patients. Eight percent said they would not take new such patients.
In a 2024 Medscape survey, 14% of physicians said they are trying to limit their Medicaid patient counts, and 66% said their biggest challenge with Medicaid was reimbursement rates.
Vladimir Sinkov, MD, founder and CEO of Las Vegas-based Sinkov Spine Center, which opened in 2020, told Becker's that not accepting Medicare patients "made our lives a lot easier."
He stopped accepting Medicare patients in 2022 as a way to gain autonomy. He told Becker's that "many rules and regulations go away because those laws apply to Medicare patients," adding that decreasing reimbursements also influenced his decision.
"Evaluating how much you’re willing to provide services to Medicare patients when payments keep dropping is essential for maintaining independence," he said.
Since he dropped Medicare patients, "it's become much easier to manage things, and our financial situation has improved," he said. "Medicare reimbursements were low and have gotten lower since then. While I enjoyed caring for Medicare patients — they often have complex conditions that I, as a spine surgeon, can address — the regulations and declining reimbursements made it impossible to stay independent."
Since the decision, he has found that while patient volume has slightly decreased, overall revenue has increased. He still sees some Medicare patients, but they have to pay out of pocket.
"My staff now spends less time dealing with regulations, freeing them up for more useful tasks," he added.
The trend of physicians dropping Medicare patients does come with side effects.
"The uncertainty among physicians regarding Medicare acceptance is a cause for concern, as it directly affects access to healthcare for millions of Americans," Ebrahim Barkoudah, MD. system chief of hospital medicine at Springfield, Mass.-based Baystate Health, told Becker's. "As the population ages and healthcare costs continue to rise, Medicare serves as a vital lifeline for many patients. Therefore, it is crucial that physicians have a clear understanding of their stance on accepting Medicare. While the current reimbursement system may not be sustainable for physicians, it is important to also consider the impact on patients and their access to quality healthcare."
Richard Beigi, MD, president at Pittsburgh-based UPMC Magee Womens Hospital, added that the trend "could significantly challenge many patients' ability to get both timely and comprehensive healthcare and could have significant negative impacts for a sizable percentage of citizens. It could lead to delayed care and diagnoses, missed diagnoses, delayed treatment — all of which can cause significant worsening of thousands of seniors' health."