2023 Medicare Physician Fee Schedule on Unsustainable Cuts


Lower Medicare payments to physicians will lead to patient care by reducing access to services, according to medical groups commenting on the 2023 Medicare Physician Fee Schedule (PFS).

In July, the U.S. Centers for Medicare & Medicaid Services (CMS) announced the 2023 proposed rule and physician groups have been responding, including with detailed comments published this week in letters to CMS Administrator Chiquita Brooks-LaSure. They argue cutting Medicare payments to physicians leads to cutting services for patients, while undermining independent physician practices, and Medicare needs reforms to ensure that does not happen.

CMS’ proposed rule includes the expiration of the 3% increase in PFS payments in 2022, cutting the conversion factor in 2023 from $34.51 to $33.08, a decrease of more than 4%.

The cuts stemming from those and other factors are simply unsustainable. The projected reduction in Medicare payments could lead to 90% of medical practices reducing access to care.

American Medical Association (AMA) members are deeply alarmed about the growing financial instability of the Medicare physician payment system due to a confluence of fiscal uncertainties physician practices face related to the ongoing pandemic, statutory payment cuts, lack of inflationary updates, and significant administrative barriers.

The payment system is on an unsustainable path that is jeopardizing patient access to physicians. The resulting discrepancy between what it costs to run a physician practice and actual payment, combined with the administrative and financial burden of participating in Medicare, is incentivizing market consolidation.

American Academy of Family Physicians (AAFP) Board Chair MD, touched on that point in that organization’s response. AAFP called for continual investment in community-based primary care, and primary care physicians are struggling to pay their staff, rent, and other expenses all while providing care on the frontlines of a global pandemic.

Medicare physician payment rates have failed to keep up with the cost of inflation and have become increasingly insufficient. These impacts have only been exacerbated by budget neutrality requirements and congressionally mandated sequestration cuts. As a result, independent, community-based physician practices are closing or being sold to health systems and other corporations. Evidence clearly shows that these trends increase prices, do not improve quality, and can worsen access to care.

Meanwhile, after the COVID-19 pandemic, group practices are struggling to return to the new normal. Heading into 2022, 73% of medical practices reported staffing was a top concern, and this year, demand for care is growing as at least 61% of group practices are reducing services due to staffing shortages.

Staffing shortages jeopardize patient outcomes and increase costs for practices and waste for the healthcare system. Looking ahead to Medicare payment policies in CY 2023, each proposed policy must be considered in the context of the current state of the healthcare system; one in which practices do not have excess time, staff, or resources to devote to administratively burdensome tasks that neither add value nor improve the quality of care provided to patients.

The American College of Physicians (ACP) echoed the other organizations’ concerns about reducing physician payments. But there were bright spots in the proposed PFS.

CMS has proposed increasing value for the evaluation and management codes used in inpatient settings.

The changes in these codes, combined with the changes made to outpatient E/M codes in 2021, are significant in recognizing the value that internal medicine physicians contribute to their patients and our health care system across a variety of health care settings.

The medical groups generally praised continued payment for telehealth services in 2023, but CMS should cover telehealth services that are set to expire 151 days after the end of the COVID-19 public health emergency, and should make permanent rules for covering audio-only telehealth by phone.

For More Information:  physician groups weigh in on unsustainable cuts in 2023 medicare physician fee schedule