Medicare Physician Payments Decline for GI Procedures Amid Rising Facility Fees
Medicare reimbursement trends for common gastrointestinal procedures, such as colonoscopy and esophagogastroduodenoscopy (EGD), indicate a decline in physician payments from 2018 to 2023, while payments to ambulatory surgical centers and hospital outpatient departments have increased or remained stable. This differential reimbursement raises concerns about increasing financial pressure on clinicians in small or independent practices and may contribute to healthcare consolidation as providers seek stability within larger hospital systems.
Researchers led by Dr. Dipen Patel at Northwestern Memorial Hospital analyzed Medicare Trends, focusing on 31 procedural codes for colonoscopy and 26 for EGD. Their findings align with broader patterns seen in other specialties, such as orthopedics, where professional fees have decreased relative to facility payments. Given Medicare's role as the largest healthcare purchaser, its reimbursement policies significantly influence overall healthcare spending and commercial insurance payment structures.
The American Medical Association (AMA) links declining physician fees to reduced rates of independent practice ownership, a concern underscored by survey data from physicians regarding practice viability. Legislative efforts have progressed to address this through proposals for automatic updates to the Medicare Physician Fee Schedule base rate tied to inflation, specifically the Medicare Economic Index (MEI). While one bill stalled, budget proposals suggest incremental increases, with further Congressional consideration ongoing.
Debate around consolidation in healthcare reflects longstanding views on the separation of hospitals and physician practices. Some experts advocate integration for efficiency and reduced fragmentation, while others caution against the diminishing independence of physicians and the potential dominance of healthcare systems and corporate entities. Financial pressures frequently prompt physician practices to negotiate buyouts initiated by themselves, seeking stability offered by hospital affiliations.
The American Hospital Association (AHA) has advocated for support mechanisms targeting struggling physician practices, especially in rural areas, positioning hospital acquisitions as a means to sustain care delivery. Meanwhile, large commercial insurers have also been investing heavily in acquiring physician practices, indicating multiple forces contributing to market consolidation. Ongoing legislative and policy discussions aim to balance financial sustainability for independent physicians with broader healthcare system efficiency.