The Centers for Disease Control and Prevention (CDC) defines health equity as, “Every person having the opportunity to attain his or her full health potential and no one is disadvantaged from achieving this potential because of social position or other socially determined circumstances.” It is indeed a noble pursuit, but without access to qualified physicians financially able to provide services to underserved populations, it is nothing more than a myth.
Today, physicians are managing the business of healthcare with the deck stacked against them. Just months after being lauded as heroes for their efforts in the pandemic, they are being rewarded by significantly reducing their ability to maintain a private independent practice. They are not just fighting to save lives but fighting to keep their practices afloat.
Decreasing Medicare reimbursement, declining commercial rates, inflation, and the ever-changing “quality” metrics that physicians are forced to comply with are leading to burnout, retirement, change of profession, consolidation, and an overall strain on our healthcare system.
Reality of Medicare Cuts and Inflation Rates
The 2023 Medicare Physician Fee Schedule Proposed Rule poses a significant reduction in Medicare reimbursement for many clinicians, including:
- Cut of approximately 4.42% to the conversion factor (containing a Congressional one-time boost of 3% for 2022).
- Reduction to the fee schedule and an outstanding threat of the 4% PAYGO decrease.
- End of the 2% sequestration moratorium in 2022.
Collectively, this could create double-digit cuts if no action is taken.
You can take action now by contacting your representatives and senators.
Medicare physician pay doesn’t go nearly as far as it used to. Adjusted for inflation in practice costs, Medicare physician pay declined 20% from 2001 to 2021 (or by 1.1% per year on avg.) according to the Federal Register, Medicare Trustee’s Reports and US. Bureau of Labor Statistics.
According to this data, Medicare physician pay has increased just 11% over the past twenty years (or 0.5% per year on avg.) In comparison the cost of running a medical practice increased 39% between 2001 and 2021.
As a result, physicians are faced with harsh realities. Do they sell their practice to a hospital? Do they cut their losses and retire early? Do they stop seeing patients at rural facilities and limit their practice to urban locations? All these considerations impact patients’ access to quality healthcare and health equity, especially for the underserved population.
Reality of Access to Healthcare
Just recently CMS released the Inpatient Prospective Payment System rule for fiscal year 2023, increasing hospital reimbursement by 4.3% and making good on promises to advance health equity. The rule would boost reimbursement by $2.6 billion next year.
The government boasts taking action to support hospitals in order to ensure access to healthcare for all, but doesn’t look at the reality of what that entails. You need physicians to deliver that quality care.
CMS relies on the Medicare Access and CHIP Reauthorization Act (MACRA), to provide a pay-for-performance program, focusing on quality, value, and accountability over volume. CMS stated that MACRA enacts a payment framework that rewards healthcare providers for giving better care instead of more service.
This program is very complicated, time-consuming, and burdensome for clinicians to implement and maintain, with minimal incentive payments. Many clinicians only participate to avoid financial penalties and actually care for fewer patients due to the program’s administrative requirements.
Reality of the No Surprises Act
The No Surprises Act (NSA) was established to ensure patients wouldn’t be burdened by surprise medical bills when receiving out-of-network (OON) care. However, the NSA has created an environment where carriers are forcing providers to accept lower commercial reimbursement rates.
Under the NSA, carriers pay OON claims at the qualifying payment amount (QPA), representing the median in-network rate. If the current contracted rate with a provider is greater than the QPA, then carriers are actively sending letters to the physicians mandating lower rates of reimbursement. If the provider doesn’t accept the rates, then the carrier forces them out-of-network, to ensure they only reimburse the provider at a lower rate.
While these rates can be fought through a federal Independent Dispute Resolution process – this is expensive, bureaucratic, and ultimately favors the carriers that seem to have bottomless resources to fight physicians. Commercial rates have long supplemented practices and offset inadequate Medicaid and Medicare rates, but no longer.
How to Create an Equitable Reality for All
There are multiple factors to ensure delivery of affordable, accessible, and quality healthcare for all. Physicians and their staff are enduring a multitude of challenges created, decided, and implemented by policymakers, governmental agencies, and payers that often solve one problem only to create another one. Policymakers need to work with clinicians to determine the path forward; physicians need a seat at the table. It’s time to create policies that ensure health equity for all.