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Medicare 8.5% payment cut could lead to reductions in services for patients


MGMA surveys physicians to find out what could happen in 2023.

Medicare 8.5% payment cut could lead to ‘alarming’ reductions in services for patients

An 8.5% cut to Medicare payments could affect patient care in medical practices across the country.

Medicare 8.5% payment cut could lead to ‘alarming’ reductions in services for patients

Anders Gilberg
Photo courtesy of MGMA

Reducing charity care, new Medicare patients, staff, and locations all are among the effects projected if Congress does not act on 2023 reimbursement levels, according to a new study by the Medical Group Management Association (MGMA). The findings came from a survey of 517 member group practices across 45 states, ranging in size from a single physician to health systems with up to 2,400 physicians.

The study included comments from responding physicians and likelihood of business decisions they could take to keep their practices open.

“MGMA’s latest findings offer an alarming look into the projected impact of the impending 8.5% cut to Medicare rates in 2023,” Anders Gilberg, senior vice president of government affairs, said in a statement accompanying the study published Sept. 21.

MGMA calculated the payment cuts based on a 4.42% reduction to the Medicare physician conversion factor and the statutory 4% Pay-As-You-Go (PAYGO) sequester. The association is asking for Congressional action to offset those cuts, along with adding an inflationary update based on the Medicare Economic Index (MEI).

Doing so “would afford medical groups the critical financial stability to ensure our nation’s seniors have unobstructed access to the high-quality healthcare they deserve,” Gilberg said.

“In anticipation of these reductions to Medicare payment and to ensure the financial solvency of their operations, over half of medical groups report they are considering limiting the number of new Medicare patients served,” Gilberg said. “Additionally, practices report being forced to consider options such as reducing their number of clinical staff, closing satellite offices, or even selling their practice due to insufficient revenue streams.”

MGMA reported that among the responding physicians, the most common practice themes that could result were:

  • Reducing charity care (66%)
  • Reducing or eliminating the number of Medicare beneficiaries served (58%)
  • Cuts to staff at all levels, including physicians, clinical support staff and administrative staff, especially in rural areas (58%)
  • Closing satellite offices or selling practices due to insufficient revenue (29%)

Physicians also forecasted delays in scheduling care, with patient waits projected up to six months. Participation in value-based payment contracts also could decline as resources and revenues are diverted away from nonessential practice activities.

The 2023 Medicaid cuts would follow a 2% reduction in payments in 2022, due to the reintroduction of Medicare sequestration, and inflation climbing to a record 9.1%

MGMA is not alone in analyzing the effects since the U.S. Centers for Medicare & Medicaid Services (CMS) released the proposed fee schedule in July. MGMA, the American Medical Association, the American College of Physicians, the American Academy of Family Physicians, the Association of American Medical Colleges, and the American Hospital Association all responded with pages of comments on the CMS plan.

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