Murphy fears more Medicare pay cuts will kill private practice

Rep. Greg Murphy (R-N.C.) worries that if nothing is done to curb Medicare payment cuts to physicians, doctors will no longer be able to afford to run their own private practices.

“We’re at a crucible where if we don’t fight these cuts now, if we don’t get rid of them, we don’t reverse them, I don’t see how private practice survives,” Murphy said Thursday during The Hill’s "State of Medicare Physician Payments."

Medicare reimbursement payments for doctors were reduced for the fifth consecutive year on Jan. 1 when payments decreased by 2.83 percent. Some argue, however, that the cut is actually higher when inflation is taken into account.

Last year, reimbursements were also cut by 1.69 percent following a 2 percent cut the year before.

These cuts are nothing new with Medicare since, by law, any changes to physician fee schedules have to be budget-neutral or not raise total Medicare spending to more than $20 million in a given year, according to KFF.

But the repeated cuts come amid rising costs for medical practices.

Inflation-adjusted Medicare reimbursements for physicians have decreased by 33 percent since 2001, according to estimates from the American Medical Association (AMA). Meanwhile, medical practice costs have increased by 59 percent during that same period.

Increasing overhead costs for medical practices are contributing to the decreasing number of physicians working independently of a hospital or other health care system.

One analysis from the AMA found that the number of physicians working in private practice dropped by 13 percentage points — from 60 percent to 46.7 percent — between 2012 and 2022.

Murphy, who is a practicing surgeon with his own private practice, noted that private practitioners spend a large amount of time trying to keep their facilities afloat.

“You’re learning to try and cut costs at every juncture to try to make sure you can pay staff,” he said. “And trying to keep staff on so that they aren’t running to another practice just to get more money.”

Private practice closures also hurt patients by interrupting their care, according to Bruce Scott, a physician and president of the AMA who also attended The Hill’s event.

Congress could do numerous things to combat the Medicare physician reimbursement cut, Murphy said, like reforming Medicare Advantage, reforming the denial and preauthorization process and passing the Medicare Patient Access and Practice Stabilization Act, which he reintroduced in late January along with nine other members of the House.

A group of physicians recently rallied outside of Congress in support of the bill, which seeks to undo the 2.83 percent Medicare reimbursement cut and provide a 2 percent pay increase.

If passed by the federal funding deadline of March 14, the bill would take effect on April 1.

Murphy is optimistic that the bill will pass this year and told The Hill that the bill has more than 90 Republican and Democratic co-sponsors.

“I’ve been having a discussion with our Speaker and the White House to make sure that this gets done soon, hopefully in the CR,” he said, using an abbreviation for continuing resolution (CR). “We’re at the deadline, we are at a crucial point as far as funding for physicians and if not now, when are we going to get this done.”

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