MedPAC and Medicare Physician Reimbursement

The Medicare Payment Advisory Commission met this month to hear presentations on reimbursement for various provider types and to explore the effects on beneficiary access and quality.  Physician reimbursement has been a particularly troubling area, with the failure of the sustainable growth rate formula several years and this year’s presentation on Medicare doctor pay contains some useful facts.   (MedPAC Presentation)  MedPAC has several times recommended that the SGR formula be repealed and replaced with a different payment methodology but Congress keeps indulging in one-time delays and fixes.  The balancing line for Medicare is not paying doctors any more than they absolutely have to, while not paying them so little that beneficiary access to care is affected.

According to this year’s presentation, Medicare spent $68 billion on physician and other health professional services in 2011, 12% of its overall spending.  Almost every beneficiary received at least one fee-schedule service during that year and about 850,000 health professionals billed for at least one encounter.  Access seems adequate, wait times actually improved from 2000 to 2010, with 22% saying they had no wait for a physician visit in 2010 versus 15% in 2001.  Around 36% of beneficiaries see a physician assistant or nurse practitioner for some or all of their services, which probably helps greatly with access.  The volume of fee schedule services per beneficiary has grown very rapidly in the last ten years, led by imaging and tests.  Primary care physicians continue to be significantly undercompensated compared to other physician types.