California physicians say stabilizing Medicare payment system will bolster access to care for patients


Soraya Marashi


In an October 31st letter to Congress, the California Medical Association (CMA) detailed its recommendations to stabilize the Medicare payment system in response to a congressional request for stakeholder input.


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These recommendations include stopping payment cuts and implementing an annual inflation update, reducing incentives that have driven provider consolidation and increased healthcare costs, reducing administrative burdens, and authorizing voluntary alternative payment models to allow more physicians to participate.

CMA also recommends addressing the gap between Medicare payment and geographic practice costs, and adopting successful value-based care models.

Donaldo Hernandez, MD, President of CMA, told State of Reform that the unsustainable Medicare physician fee schedule is harming physicians’ ability to participate in value-based care models and threatening access to patient care. 

“It has been a challenge for a long time for physicians to be able to afford to see patients on Medicare,” Hernandez said. “We’re now dealing with the post-pandemic world. A lot of healthcare professionals have left the profession.

There’s mass retirement occurring on the nursing side, and coupled with what’s going on with inflation plus the actual cost of providing care in office, Medicare just doesn’t cover that cost, so you end up losing money. It becomes an issue of affordability for medical practices to see these patients that they want to see.”

According to CMA, around 50% of California physician practices’ patient populations are covered by Medicare. The association emphasized the importance of Medicare on all other healthcare payment systems, as the Medicare fee schedule is what dictates the payment rate for all private payers as well.

Hernandez said that, as nearly 76% of physicians report that Medicare payments no longer cover their costs to provide care, and as many physicians have been leaving the practice due to retirement and pandemic-related challenges, many Medicare patients that were in their practice and being seen in a community setting can no longer find a medical home because physicians in the state are not taking on new Medicare patients.

“We want to take care of those patients, but we can’t do it at the expense of insecurity of being able to maintain their practices,” he said. “So it becomes incredibly important that the Medicare system becomes reformed, but also that we don’t keep experiencing this annual risk of having cuts. We keep trying to fight and stay at zero and it’s just an ongoing challenge and it remains problematic.”

CMA says that stabilizing Medicare payments and investing in appropriate levels of payment will ensure an adequate supply of physicians in the Medicare program and reduce overall healthcare costs. In the letter to Congress, CMA warns that as physicians leave the Medicare program, patients are forced to seek care in emergency rooms or are hospitalized when their conditions worsen, further increasing costs to the Medicare program.