Medicare Volume Growth and Shift in Payments From Physicians to Non-Physician Practitioners Under Statutory Budget Neutrality

• Published in: Inquiry (Chicago) 2024-01, Vol.61
• Main Authors: Christensen, Eric W., Nicola, Gregory N., Rula, Elizabeth Y., Nicola, Lauren P., Hirsch, Joshua A.
• Format: Article
• Language: English
• ISSN: 0046-9580; 1945-7243
• DOI: 10.1177/00469580241249076

Volume increases, inflation, statutory freezes in physician payments, and the budget neutrality requirement for the Medicare Physician Fee Schedule have resulted in persistent inflation-adjusted conversion factor decreases. This study aimed to determine if relative value unit (RVU) volume increases on a per beneficiary basis has counteracted conversion factor decreases and inflation to maintain Medicare reimbursement per beneficiary, overall and across specialties. Using aggregated data for 100% of Medicare part B claims (2005-2021), we computed the percentage change in reimbursement per beneficiary, nominal and inflation-adjusted, by specialty. These trends were then adjusted by separately holding constant RVUs per beneficiary and the conversion factor to demonstrate the impact of budget neutrality. Inflation-adjusted reimbursement per beneficiary increased 9.9% over the 2005 to 2021 period; this trend encapsulated a 64.8% increase in RVUs per beneficiary, offsetting a 33.6% inflation-adjusted conversion factor decline. RVU changes per beneficiary varied widely across clinicians (+45.5% for physicians to +328.2% for non-physician practitioners) and by specialty (−36.1% for cardiac surgery to +1106% for nurse practitioners). Given RVU increases, conversion factor decreases, and inflation combined, reimbursement per beneficiary decreased 2.3% for physicians and increased 16.3% for limited-license physicians and 206.5% for non-physician practitioners. Overall, increased RVU volume per beneficiary has offset conversion factor declines within the budget neutral system. However, substantial redistribution has occurred across provider types, with reimbursement declining slightly for physicians while tripling for non-physician practitioners. Certain physician specialties, particularly procedural specialties, have declined most. Future research should assess the impact of specialty-specific reimbursement changes on patients’ access to care.