2023 Federal budget healthcare provisions include telehealth flexibilities & cuts to Medicare physician payments
A look at the federal government’s recently signed $1.7 trillion spending bill points to a continually challenging environment for the entire healthcare industry, but particularly for physicians, as evidenced by additional cuts to Medicare reimbursement this year and next. A brief summary of the major healthcare provisions is shared below to help clarify the impact on medical practices nationwide, particularly traditional fee-for-service models. Important to note is the very minimal effect these changes will mean for concierge medicine physicians whose practices are sustained – and proven sustainable – with revenues derived primarily from annual membership fees.
- The Medicare Physician Fee Schedule includes a 2% cut in 2023 and about 3% in 2024. While this represents a slight improvement from the 4.5% cut previously announced for this year, the downward trajectory for reimbursements is ongoing, with no relief in sight. Additionally, these cuts are almost certain to be adopted by commercial insurers, who take their cue from Medicare reimbursement rates. Coupling this with the trailing twelve months increase in the CPI of 7.1% adds up to the need for physicians to raise their practice volume by greater than 9% each day to just maintain current practice income.
- Extensions to Medicare telehealth reimbursement provides some good news in the short term. A number of Medicare payment measures enacted during the pandemic will be extended and expanded through Dec. 31, 2024, most importantly:
- Originating sites expanded to include any site where the patient is located.
- Continuation of coverage and payment for audio-only telehealth services.
- Continuation of state laws regarding “coverage parity” (payers must cover a service delivered via telehealth if the service is covered in-person) and “payment parity” (the same amount must be paid for a service whether it is delivered in-person or via telehealth). Note: currently 43 states and the District of Columbia have coverage parity laws; 24 states have payment parity laws.
For additional information, we recommend: Medical Economics 2023 federal budget 1.3.23
As a concierge medicine pioneer, we have witnessed the decades-long relentless erosion of physicians’ financial security, professional satisfaction and emotional well-being…and the stunning positive transformation made possible through a change to the Specialdocs membership medicine model. We encourage you to take the first step and connect with us.