Skip to main content

Medicare’s Bizarre Physician Fee Schedule Change

By November 6, 2023Commentary

If you want to see government bureaucracy run amok, just read any of the annual Medicare provider compensation rules.  Hundreds of pages of gobbledygook.  I have pointed out repeatedly that American health care is expensive because we pay physicians a lot and hospital managers are grotesquely overpaid and their non-profit facilities actually charge very high prices and make huge profits.  I am not making a judgement on whether physicians are overpaid, they are the cornerstone of the medical system.  But Medicare does bizarre things in regard to doctor compensation.  Right now, inflation is causing very large increases in the costs of running a medical practice.  Medicine is labor intensive, the notion of productivity rises to offset those cost increases is elusive.  So what is Medicare proposing to pay physicians next year?  A cut of at least 1.25%, and in reality, more.

I assume CMS (the Centers for Medicare Services) intended to cut specialists’ pay, as it has been after that for years, but the cuts will affect all physicians, particularly the few remaining in independent practices.  Meanwhile, hospital outpatient departments which provide the same services are getting a 3% increase, despite the fact that they charge far more than phsyican offices.  Makes no sense at all.  And CMS continues piling all kinds of new regulatory requirements on doctors.  The fact sheet on the rule change is here, but click on the link to the actual rule if you are having trouble sleeping.  I recommend at least perusing that rule, so you can get a flavor for how much money could be saved by firing at least half of all federal employees.  (CMS Fact Sheet)

Leave a comment