INSURASALES

Physician Exit Rates from Medicare Fee-For-Service Rise, Impacting Primary Care Access

A recent study published in JAMA Health Forum by health economists Michael E. Chernew and Hannah T. Neprash highlights an accelerating trend of physicians exiting Medicare fee-for-service (Traditional Medicare) from 2010 to 2024. The researchers analyzed Medicare Part B claims data linked with national provider identifiers, defining exits as the absence of any Medicare claims for 12 consecutive months. Their findings indicate that the annual rate of physician exits increased from 1.80% to 3.60%, with variations throughout the period, including a COVID-19 pandemic-related spike between 2020 and 2021 and a rising trend starting again in 2023 above pre-pandemic levels.

Primary care physicians showed a higher exit rate of 4.41%, compared to hospital-based specialists (3.50%), surgical specialists (2.99%), and medical specialists (2.49%). The age-adjusted exit rate increase in primary care particularly suggests potential concerns regarding primary care physician supply. The study underscores that though pandemic-related challenges likely contributed to increased exits after 2021, other factors such as increased administrative burden, including clinical documentation and portal messaging, also played significant roles.

Moreover, recent reductions in Medicare Part B payment rates, with five consecutive years of cuts followed by a proposed 2.5% base rate increase in 2026, potentially influenced physician departure rates. However, stable exit rates observed during 2014 to 2016 indicate that payment changes alone do not fully explain the trends. The variation of exit rates by specialty highlights the need for further investigation into how Medicare reimbursement and policy reforms impact physician participation across specialties.

This study provides critical insights for payers, providers, and regulators focused on sustaining Medicare provider networks amid changing healthcare delivery dynamics. Understanding exit trends is essential for addressing workforce capacity concerns, especially in primary care, and evaluating the effects of regulatory and reimbursement environments on physician engagement in Traditional Medicare. The data points to a need for strategic adjustments in Medicare policy and support mechanisms to stabilize physician participation rates in this vital program.