The House Committee of Small Business has been hearing testimony this month regarding the impact of the Centers for Medicare and Medicaid Services (CMS) planned cuts for physician fee payments. Physician fees are scheduled to be cut by 10.6% in June. However, business expenses and malpractice insurance costs are expected to rise significantly in the future. As with other cuts in Medicare spending that DOTmed has covered (see https://www.dotmed.com/news/story/5773/), these cuts might lead to physicians forgoing seeing new patients, investing in new technologies, and closing practices. The Committee and Chairwoman Nydia M. Velazquez (D-NY) are concerned that the cuts will hurt small medical practices, and reduce access to quality health care.

Herb B. Kuhn, Deputy Administrator of CMS, explained in testimony advocating for the cuts, that the proposed reduced fees would encourage physicians to provide the right care at the right time, and also avoid the cost of unnecessary services; Kuhn stated that there needs to be a system that "aligns payment with quality and efficiency."

From the perspective that cuts will negatively impact health care, Mona Reimers of the Medical Group Management Association testified that Medicare payments are not even currently accurately covering the cost of delivering health care. MGMA physicians are already engaging in cost-containment through reduction of staff and investment in new equipment.
Tom DiAngelis of the American Physical Therapy Association and its Private Practice Section testified that the 10.6% cut in physicians fees will be particularly harsh on physical therapists. In addition to the 10.6% cut, there will be an $1810 per beneficiary cap per year on outpatient services, regardless of patient condition or diagnosis. There will also be a "ripple" effect as fewer physicians accept Medicare, as Medicare requires a physician-approved plan of therapeutic care.

Further testimony confirming the negative impact came from Cecil B. Wilson, MD, Immediate Past Chair of the American Medical Association (AMA). Wilson stated that the majority of physician practices are small businesses--50% of physician practices include less than five physicians, but still account for 80% of outpatient visits. In the AMA's own survey of around 9,000 physicians, 60% said that under the new pay cuts they would have to limit new Medicare patients and would not be able to meet their current payroll. In addition, two-thirds of physicians will have to defer investments including the purchase of new medical equipment and information technology.

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