Healthcare PolicyOffice Practice InfoPhysician Office IssuesPreventive Medicine


As a follow-up to my post on the “death of primary care,” an article in the February 28th issue of JAMA focused on the disparity in payments to specialists compared to primary care physicians; in this case family physicians and internists. Specialists have been paid more than primary care physicians forever. Specialists usually perform a procedure which receives higher reimbursement while primary care doctors make money only by seeing one patient after another, performing evaluation and management services (E/M).

The abstract of the article referenced starts “US primary care physicians have lower mean incomes than specialists likely contributing to workforce shortages.” Students are attracted to more lucrative specialties so fewer are going into primary care. To reduce the income gap, the Centers for Medicare and Medicaid Services (CMS) increased payment for evaluation and management (E/M) services and relaxed medical record documentation requirements. Evaluation and Management services are the bread and butter of primary care. They include the taking of the patient’s history, examining him/her, making decisions on diagnostic tests, interpreting the results, finalizing the diagnosis, and managing the condition. E/M services are the “cognitive work” the physician performs on every patient he sees. They are graded 1 through 5 based on complexity of the problem and time spent with the patient. Payment increases as the complexity of the case increases. 

E/M services have been reimbursed at a lower rate for primary care doctors than for specialists for decades. Most astoundingly, CMS decided that was unfair and in 2021, increased E/M payments for primary care. For comparison, general surgeons, who infrequently perform E/M services, received a 4.2% reduction in payment and family physicians received a 12.1% increase in E/M payments.

The overall effects of this alleged payment increase were the following:

     1. Had the numbers of visits and codes performed by specialists remained as they were

           before the increase, the gap in payment between primary care and specialists would

           have decreased by 6.2%.

     2. Nearly all specialists (especially psychiatrists, orthopedic surgeons, and urologists)

           increased their use of higher level E/M services codes to a degree that the median

           payment gap decreased a mere 2%.

So much for helping primary care doctors to be paid more reasonably (I won’t say adequately because payments are woefully inadequate). So much for “meaningfully alter(ing) the financial position of primary care physicians or to enhance the sustainability of primary care practices.” The net effect of increased E/M payment increases was that some specialists who did not get a reduction in payment used E/M codes more often than normal increasing revenues and diminishing the beneficial effect the increases were to have for primary care. 

“Many primary care practices struggle financially, forcing them to consider closure or consolidation and making it difficult for them to afford the support staff needed for physicians to gain reprieve from administrative burdens and engage in meaningful work.” The payments primary care doctors receive just don’t cut it. This weak attempt by CMS to appear altruistic was a joke. The other concern mentioned is the committee that devised these increases was “disproportionately composed of specialists who may have an interest in maintaining high payment levels…” Some experts propose a separate Medicare conversion factor for E/M services delivered by primary care physicians. (See previous blogs on coding, RVU’s, DRG’s, and Medicare Conversion factor). 

Dr. G’s Opinion: Medicare’s undervaluing of E/M services for primary care physicians will never change. NEVER. The government has its priorities misplaced and is completely willing to let the quality of medical care suffer in the name of budget neutrality. The government is also perfectly willing to let the competence of medical graduates suffer because the best students aren’t being encouraged or incentivized to go into primary care. Medicine is being dumbed down, and doctors are being squeezed financially beyond the ability to stay in practice. These token increases are just appeasements and every physician dependent upon Medicare to make a living knows it. The federal bureaucracy at CMS is set in stone, and despite the best efforts of medicine’s lobbying groups, it will change only when physicians agree to a nationalized health care system. 

References: Neprash HT, Golberstein E, Ganguli I, Chernew ME. Association of Evaluation and Management Payment Policy Changes with Medicare Payment to Physicians by Specialty. JAMA 2023 Feb 28;329(8):662-669.

Khullar D. Payment, Priorities, and Primary Care. Can Cognitive Work be Properly Valued? JAMA 2023 Feb 28;329(8):635-636.

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