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Medicare Payment Cuts Could Lead to Fewer Beneficiaries Served

Analysis  |  By Jay Asser  
   September 29, 2022

A survey of physicians reveals the potential ramifications of the impending 8.5% slashing of Medicare rates in 2023.

Many providers are considering reducing or eliminating the number of Medicare beneficiaries served to offset looming Medicare payment cuts, according to a survey conducted by the Medical Group Management Association (MGMA).

Respondents to the survey, comprised of 517 medical group practices across 45 states, ranging in size from small single provider practices to large health systems with 2,400 physicians, revealed what business decisions they may make in response to the Medicare rate change.

As part of the 2023 Medicare Physician Fee Schedule proposed rule, practices are facing a 4.5% reduction to the Medicare conversion factor and a 4% Pay-As-You-Go sequester, resulting in a reduction of payments by at least 8.5%.

According to 92% of those surveyed by MGMA, Medicare rates before the projected cuts are already insufficient for covering costs.

In response to the proposed rule, 58% of respondents said they are considering limiting the number of new Medicare patients. Additionally, 66% said they may reduce charity care, 58% answered they could reduce the number of clinical staff, and 29% state they are looking into closing satellite locations.

Other possible effects from the survey included projected delays in scheduling care, which could result in up to six months' wait for visits, and the reduction of participation in value-based payment contracts.

The survey results, according to MGMA president Anders Gilberg, offer an "alarming look" into how the proposed rule could hamper providers' ability to treat patients.

"MGMA urges Congress to act expeditiously to prevent the looming 2023 Medicare physician payment crisis," Gilberg said in a statement. "In addition to offsetting the proposed 4.42% cut to the Medicare physician conversion factor and addressing the 4% statutory Pay-As-You-Go (PAYGO) sequester, MGMA is also advocating for an inflationary update based on the Medicare Economic Index (MEI), which would afford medical groups the critical financial stability to ensure our nation’s seniors have unobstructed access to the high-quality healthcare they deserve."

Other medical groups, such as the American Hospital Association, have also released their own comments pushing back on the rule and warning of the consequences for providers and patients.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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