News: Physician reimbursement decreased 2.3% between 2005 and 2021, research shows

A new report issued by the Harvey L. Neiman Health Policy Institute suggests that, despite a 45.5% increase in patient services, physician reimbursement has declined by 2.3% from 2005–2021.

According to HealthLeaders, the Medicare budget neutrality requirement “is intended to balance the program’s expenditures against its budget as new service are added and volume increases.” However, the decrease in physician reimbursement appears to prove otherwise.

The report also demonstrated that there was a 9.9% increase in payments across all medical providers and suppliers, as well as a 206.5% increase in payments to non-physician practitioners; moreover, HealthLeaders noted, payments to limited-license physicians increased by 16.3% while payments to medical suppliers increased by 44.4%.

“Continued decline of Medicare reimbursement relative to reimbursement by private insurance incentivizes providers to favor privately insured patients,” Joshua Hirsch, MD, a research fellow at Neiman told HealthLeaders. “Our study pinpoints the extent to which real decreases in reimbursement are occurring despite greater consumption of care.”

Notably, this past March, President Biden signed a spending bill that cut the Physician Fee Schedule reimbursement rates to 1.69%.

Editor’s note: To read the Neiman report, click here. To read the HealthLeaders coverage, click here.