Medicare Rate Cut Puts Doctors and Patients at Risk

When the first outbreak of COVID-19 hit the United States earlier this year, it created an unprecedented crisis within the health care industry that is still unfolding to this day. Health care providers and hospitals alike still haven’t recovered from the near-shutdown of American health care, and optimistic projections put patient volume below normal levels well into 2021. In the face of this system-wide fiscal crisis, the agency that regulates Medicare is scheduled to cut reimbursement rates to doctors already struggling to stay in business. Our system might never recover.

In January, the Centers for Medicare & Medicaid Services will move forward with a new Physician Fee Schedule that will make significant changes to office-based and primary care reimbursement. As a result, many hospital-based providers will in turn see significant cuts to their reimbursement. This includes front-line health care workers who are already dealing with unprecedented mental, physical and financial strain due to their work fighting the ongoing pandemic.

As the president and CEO of TeamHealth, one of America’s largest multi-specialty medical groups that provides emergency care in hospitals and nursing homes across the country, I can tell you that this cut will have severe and long-lasting consequences to emergency care providers and our health care system at large. The health care safety net is already under significant stress. Doctors and hospitals in underserved rural and urban areas were under serious financial strain before the pandemic. More than 130 rural hospitals have closed in the last decade. More closures are likely coming as a direct result of COVID-19. Even more will close if CMS moves forward with its physician rate cut in January.

Emergency care providers will be hit hard, but they won’t be alone. The rate cut will also hurt providers in post-acute care specialties. That means doctors and therapists working in nursing homes and skilled nursing facilities – ground zero for the COVID-19 outbreak in many communities – will also be facing significant pay cuts. These providers already receive some of the lowest Medicare reimbursement rates. A further cut would add another burden and likely drive these providers to spend less time working in these facilities and more time in office-based settings where they would enjoy a higher pay rate.

At the height of the pandemic, the federal government reported a loss of 800,000 jobs in the health care industry. Even with surges in COVID-19 patients, emergency department patient volume dropped as much as 50 percent. Other specialties like anesthesiology saw declines as high as 70 percent. Recovery has been slow. While patient levels are moving in a positive direction, many are still putting off elective surgeries, screenings and other procedures. In this environment, health care providers are struggling to turn the fiscal corner. Thanks to a lack of revenue and an uncertain future, many providers are still teetering on the edge of insolvency or bankruptcy. A third of private surgery practices are still concerned they will have to close their doors.

These rate cuts could not come at a worse time. Instead of cutting their pay, lawmakers and regulators should be doing everything in their power to put as many providers on the front lines as possible. For months, the CMS administrator has heard from clinicians about the harm that will ensue if CMS moves forward with its new fee schedule.

To date, these warnings have been unheeded. If CMS won’t change course, Congress has to act quickly to halt the upcoming reimbursement changes, and bipartisan legislation was just introduced in the House of Representatives that would spare providers from the scheduled rate adjustment. On behalf of TeamHealth and our 16,000 clinicians, I strongly urge Congress to address the budgeting rules that will result in a pay cut for providers across the country and adhere to the current reimbursement fee schedule for 2021 and 2022.

The proposed Medicare rate cut is a bad idea under any circumstance. In the current environment, it would be disastrous. We are running out of time to solve this problem and prevent more doctors and practices from closing their doors for good. Congress can’t allow that to happen – especially now. Lawmakers should stop the rate cut and make sure we have a functioning health care system in place for the current pandemic and beyond.

Leif M. Murphy is the president and CEO of TeamHealth.

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