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Why doctors are disenchanted with Medicare


While physicians are getting less of a Medicare pay cut than they thought this year (Congress voted to cut Medicare payments by 2%, which was less than the expected 8.5%), Medicare still pays physicians only 80% of what many third-party insurers pay.

Moreover, those reimbursements are often slow to arrive, and the paperwork is burdensome. In fact, about 65% of doctors won’t accept new Medicare patients, down from 71% just 5 years ago, according to the Medscape Physician Compensation Report 2023.

Worse, inflation makes continuous cuts feel even steeper and trickles down to physicians and their patients as more and more doctors become disenchanted and consider dropping Medicare.

Medicare at a glance

Medicare pays physicians about 80% of the “reasonable charge” for covered services. At the same time, private insurers pay nearly double Medicare rates for hospital services.

The Medicare fee schedule is released each year. Physicians who accept Medicare can choose to be a “participating provider” by agreeing to the fee schedule and to not charging more than this amount. “Nonparticipating” providers can charge up to 15% more. Physicians can also opt out of Medicare entirely.

The earliest that physicians receive their payment is 14 days after electronic filing to 28 days after paper filing, but it often can take months.

Physicians lose an estimated 7.3% of Medicare claims to billing problems. With private insurers, an estimated 4.8% is lost.

In 2000, there were 50 million Medicare enrollees; it is projected that by 2050, there will be 87 million enrollees.

Why are doctors disenchanted?

“When Medicare started, the concept of the program was good,” said Rahul Gupta, MD, a geriatrician in Westport, Conn., and chief of internal medicine at St. Vincent’s Medical Center, Bridgeport, Conn. “However, over the years, with new developments in medicine and the explosion of the Medicare-eligible population, the program hasn’t kept up with coverages.” In addition, Medicare’s behemoth power as a government-run agency has ramifications that trickle down irrespective of a patient’s insurance carrier.

“Medicare sets the tone on price and reimbursement, and everyone follows suit,” Dr. Gupta said. “It’s a race to the bottom.”

“The program is great for patients when people need hospitalizations, skilled nursing, and physical therapy,” Dr. Gupta said. “But it’s not great about keeping people healthier and maintaining function via preventive treatments.” Many private insurers must become more adept at that too.

For instance, Dr. Gupta laments the lack of coverage for hearing aids, something his patients could greatly benefit from. Thanks to the Build Back Better bill, coverage of hearing aids will begin in 2024. But, again, most private insurers don’t cover hearing aids either. Some Medicare Advantage plans do.

Medicare doesn’t cover eye health (except for eye exams for diabetes patients), which is an issue for Daniel Laroche, MD, a glaucoma specialist and clinical associate professor of ophthalmology at Mount Sinai Medical Center, New York.

“I get paid less for Medicare patients by about 20% because of ‘lesser-of’ payments,” said Dr. Laroche. For example, as per Medicare, after patients meet their Part B deductible, they pay 20% of the Medicare-approved amount for glaucoma testing. “It would be nice to get the full amount for Medicare patients.”

“In addition, getting approvals for testing takes time and exhaustive amounts of paperwork, says Adeeti Gupta, MD, a gynecologist and founder of Walk In GYN Care in New York.

“Medicare only covers gynecologist visits every 2 years after the age of 65,” she said. “Any additional testing requires authorization, and Medicare doesn’t cover hormone replacement at all, which really makes me crazy. They will cover Viagra for men, but they won’t cover HRT, which prolongs life, reduces dementia, and prevents bone loss.”

While these three doctors find Medicare lacking in its coverage of their specialty, and their reimbursements are too low, many physicians also find fault regarding Medicare billing, which can put their patients at risk.


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