Republican lawmakers have outlined significant Medicare cuts, which include implementing site-neutral payments, eliminating funding for hospital bad debts and reducing uncompensated care funding. Hospitals' access to special Medicare payment classifications could also be restricted to limit costs.
Patients
Medicare cuts often cause health systems to either shut their doors or begin denying care for certain patients. Medicare physician payment has effectively declined 26% since 2001, causing several major health systems to drop patients. This causes patients to have to find new health systems, or travel even further to receive care.
Additionally, following cuts, several health systems, both large and small, have had to close their doors for good, jeopardizing care in certain regions.
Health system employees
The American Medical Group Association, which represents more than 175,000 providers, is pushing back against Medicare cuts.
In a Dec. 4 letter written to Congress, health systems and medical groups warned that these cuts could trigger further layoffs, service reductions and delays in addressing social health needs.
Physicians
Physician pay will continue to fall if Medicare is cut. "Physicians' pay has generally been dramatically reduced due to inflation over the past few years and CMS cuts would be adding insult to injury. There will be a lot of consequences to the reduction in physician pay. Increasingly, patients do not see doctors," Harel Deutsch, MD, co-director of the Rush Spine Center in Chicago, told Becker's.
"It is extremely disappointing to hear about any proposal that would devalue the ongoing efforts of physicians to provide the highest quality level of safe, compassionate patient care," Brad Lerner, MD, president of Chesapeake Urology Associates and Medical Director of United Urology Group Ambulatory Surgical Centers in Baltimore, told Becker's. "Along with increasing regulatory and compliance demands, as well as non-clinical tasks that require additional hours of time, this proposal, if approved, could potentially lead to higher physician attrition and shortages in the workforce."
Small health systems
When reimbursement rates are cut, it is small, independent health systems that often suffer the most. While large health systems have resources or private equity backing to withstand challenges, small systems often do not.
In 2024, several shuttered independent practices pointed to declining reimbursements as the cause.
One notable practice, Albany, Ga.-based Orthopaedic Associates is planning to close its doors permanently April 30, citing increasing costs and declining reimbursements.