PRIMARY CARE DOCS LEAVING MEDICARE

My position on Medicare pay to physicians is clear. I’ve stated it in many past blogs, and nothing has happened to change my opinion. Physicians have been getting screwed by Medicare since the January 1, 1992, when the Resource-Based Relative Value Scale was adopted as the standard by which Medicare pays physicians. That means for 33+ years the Centers for Medicare and Medicaid Services has annually managed to reduce the amount physicians are paid for services rendered to American senior citizens, and have persistently de-valued the care physicians have provided.

I will forgo an explanation of why and how that devaluation has occurred, but it involves the Medicare Conversion Factor and the monetary value of Relative Value Units (RVU’s). When you take into account inflation and the normal appreciation in the cost of services, physicians are now paid the equivalent, or less, of what they were paid 20 years ago while their fees have increased 5-fold. Medicare prohibits doctors from billing for the difference between their fee and what Medicare pays so doctors lose money on every patient. As I’ve said before, reimbursement became so bad, and overhead increased so much, that I could no longer maintain an office practice. My “out” was to become an employee of a large multi-specialty group. 

According to research from the University of Minnesota and Harvard Medical School reported in Medscape, primary care physicians are leaving Medicare in ever-increasing numbers; more often than specialists. In 2023, 4.4% of PCP’s left Medicare. In 2014, that number was 3.3%. That doesn’t sound like much, but with 279,194 FP’s, general internists, and pediatricians, 4.4% is 12,284 doctors who left for greener pastures. The Medicare Payment Advisory Committee has argued that “current [payment] models undervalued the work of primary care physicians compared with specialists.” No truer statement was ever made!

Alternative payment models sought by PCP’s are the Concierge Model, profiled in a previous blog, and “direct primary care.” These are similar entities that allow unlimited access to the primary care doctor in exchange for a monthly, or annual, fee. Insurance billing is limited to hospitalizations and emergency care. Office visits, phone calls, wellness checks are all included in the monthly/annual fee. 

Medicare has been a nightmare for physicians, especially the non-surgical, non-procedure-oriented primary care practices. A physician whose practice relies heavily on Medicare payments has had some difficult times, financially. He/she may be near insolvency. Physicians have had to cut costs, cut staff, increase the number of patients they see, or extend office hours just to make ends meet. The most drastic move physicians can make is dropping out of Medicare, altogether. This can be good or it can be disastrous. A thorough evaluation of one’s finances is wise before dropping Medicare because there’s a 2-year waiting period if you want to re-enroll. They get you coming and going. 

Financial stress didn’t affect me until late in my practice years, but if it had earlier, I’m not sure what I would have done. The concierge model takes an affluent patient base which I didn’t have. It also takes a lot of financial savvy which I also didn’t have. Becoming an employee was the right choice for me, and it came at a time as I was looking for less responsibility rather than more!

Reference: Young KD. Primary Care Physicians Increasingly Leave U.S. Medicare Medscape 2025 July 31.