Medicare reimbursement cut strains independent physicians, could affect patients

Local physicians say they are worried that a cut in Medicare payments will threaten their ability to treat patients.

"It's getting to the breaking point now," said Dr. Terrence Cronin Jr., a Melbourne dermatologist who is president of the 20,800-member American Academy of Dermatology, and in that role has made Medicare reform his top priority. "Payment instability threatens our ability to provide care.”

The Centers for Medicare & Medicaid Services approved a cut of 3.37% in payment for physician services in 2024. Cronin says that is impacting the ability of medical practices to cover expenses like equipment, rent, and nursing and office staff salaries.

"Put plainly, our ability to care for our patients is threatened, putting patients at risk of more hospitalizations for untreated illnesses and chronic conditions," Cronin said.

Cronin noted that, under current federal budget-neutrality requirement for Medicare, any increase for certain physician services must be balanced by cuts elsewhere.

Dr. Terrence Cronin Jr., at right, a Melbourne dermatologist, talks with Tony Kessinger, a 75-year-old patient of his  who is on Medicare. Cronin is president of the American Academy of Dermatology, and in that role has made Medicare reform his top priority.
Dr. Terrence Cronin Jr., at right, a Melbourne dermatologist, talks with Tony Kessinger, a 75-year-old patient of his who is on Medicare. Cronin is president of the American Academy of Dermatology, and in that role has made Medicare reform his top priority.

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According to the American Medical Association, while physicians were hit by the 3.37% cut, other providers of Medicare services received 3.1% to 3.3% increase — including hospitals for inpatient and outpatient services, long-term-care facilities, same-day surgery centers and hospices.

The AMA and more than 120 other national medical organizations and state medical societies recently called on Congress to reverse the Medicare physician pay cuts that took effect Jan. 1.

"Failure to reverse these cuts will be harmful to the continued viability of physician practices andtheir ability to care for patients," they wrote in their letter to Senate and House leadership. "After three consecutive years of cuts to Medicare services, physicians are at a potential breaking point. Facing a nearly 10 percent reduction in Medicare payments over the past four years and rising practice costs, on top of the burdens and burnout associated with the pandemic, some practices are already limiting the number of Medicare patients they treat."

The AMA letter said it anticipates that the Medicare reimbursement cuts "will be felt hardest by small, independent practices, like those in rural and underserved areas that continue to face significant health care access challenges. Continuing down this path is simply unsustainable."

Impacts on physician practices

Dr. Summerpal Kahlon, a physician at Rocket Health Care, said the Medicare reimbursement issue is affecting the medical community in a number of ways.
Dr. Summerpal Kahlon, a physician at Rocket Health Care, said the Medicare reimbursement issue is affecting the medical community in a number of ways.

Dr. Summerpal Kahlon, a physician at Rocket Health Care — which has medical offices in Cocoa Beach, in Melbourne and on Merritt Island — the Medicare reimbursement issue caused by this federal balancing act is affecting the medical community in a number of ways.

And it's affecting not only older patients who are on Medicare, but also younger patients who have private insurance, either through their employer or on their own. That's because the reimbursements insurers pay doctors often is tied to a percentage of what Medicare pays for the same service or procedure.

Kahlon — who is board-certified in internal medicine and infectious diseases — said, because of that tie-in between Medicare reimbursement and private insurance payments, some doctors might still accept patients on Medicare, but won't accept some or all private insurance.

Other trends Kahlon is seeing include:

  • More concierge or boutique medical practices opening. These practices charge patients an annual membership fee, as a way to carry a smaller roster of patients, thereby giving more time to each patient during a visit.

  • More high-volume medical offices, in which the practitioners might schedule four to six patients an hour.

  • Greater use of what's known as "extenders" — staff like nurse practitioners or physician assistants who take on roles that previously were handled by doctors in a medical office.

  • More medical offices offering ancillary services, such as medical weight loss, and aesthetic and cosmetic services. That's a way to supplement revenue.

  • Physicians closing or selling their own independent practices because of rising expenses, coupled with flat Medicare reimbursements, then becoming an employee of a hospital-run facility or other medical group.

Officials: Cuts part of the bigger picture

But some analysts of the federal budget, as it relates to Medicare, contend that the fears of doctors are overstated.

And Centers for Medicare & Medicaid Services officials defended the latest action on Medicare reimbursement, citing what they said were overall improvements to the program.

“CMS remains steadfast in our commitment to supporting physicians and ensuring that people with Medicare have access to the care they need to stay healthy, as well as navigate health conditions they are facing,” CMS Administrator Chiquita Brooks-LaSure said, when announcing the new reimbursement rates.

Dr. Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, said newly implemented changes mean that people with Medicare will be able to access marriage and family therapists and mental health counselors for behavioral health treatment, as well as access culturally sensitive care from community health workers, care navigators and peer support workers, among other improvements.

“Taken holistically, these are some of the largest changes ever towards a Medicare that recognizes people with Medicare as whole persons, with their own families and unique life stories," Seshamani said. "After all, people are more than the sum of their ailments and diagnoses.”

But some doctors aren't buying into the administration's arguments.

Among physicians who have closed their practices is Dr. Geoffrey Lim, a member of the American Academy of Dermatology that Cronin heads. Lin said he and his wife, Dr. Mona Sadeghpour, tried to make a go of their Colorado practice, but found that "the landscape of medicine with insurance is too unpredictable."

With a staff of eight, "high, high overhead costs," plus soaring costs for some medical supplies, Lim said he and his wife tried to shift one-third of their practice to cosmetic procedures like Botox and filler treatments. Those procedures typically are not covered by insurance, and the patients directly pay the provider for them.

Eventually, they closed their practice entirely, and found new doctors to refer their patients to. They have moved to western Pennsylvania, where Lim now is an an employee of a dermatology facility that is affiliated with a venture equity company.

Dr. Craig Deligdish, who oversees OMNI Healthcare, a 10-office, primary-care-focused, multi-specialty physician group, said Omni uses a different approach. It is part of a Medicare program that allows providers to be paid significantly more than the Medicare-allowable rate for seeing certain types of Medicare patients.

"We would probably not be able to stay in business," if Omni was not part of this program, Deligdish said, adding that "Medicare should be paying more" to physicians, as costs rise for medical staff and supplies.

Congressional proposal to solve problem

U.S. Rep. Bill Posey, R-Rockledge, is among the members of Congress seeking to do something about the issue, through his co-sponsorship of legislation that would provide an automatic annual payment update for Medicare providers, so that significant payment cuts are avoided in the future.

“Preventing cuts in Medicare’s reimbursement rate is critically important to maintaining seniors’ access to Medicare," Posey said. "Every year, the costs of running a medical practice go up, just like any other small business. When Medicare cuts the reimbursement rate, doctors and other health care providers get squeezed, which adversely impacts medical care."

Cronin said many doctors support what Posey is trying to do.

"As a dermatologist, I see terrible diseases from patients who need immediate attention. Otherwise their prognosis can be fatal," Cronin said, referring to the roughly 9,500 people in the United States who are diagnosed with skin cancer every day. "If these cuts are allowed to continue, access to their care is threatened."

In general, Cronin said, doctors with their own independent offices are finding it difficult to fill staff positions. That's because a growing number of nurses and other medical professionals are retiring early, or are leaving independent practices for higher-paying positions at hospitals or in other settings, with doctors unable to match those pay levels. Also, some doctors are closing their practices to become employees of a large medical group or hospital. Cronin said some doctors in private practices might decide not to take on new Medicare patients.

Tony Kessinger, a 75-year-old resident of West Melbourne who has Medicare coverage plus a supplemental policy, says he is concerned about how he and other patients will be affected. Kessinger was diagnosed with Parkinson's disease in 2004, and now sees a family practitioner, a neurologist, an ophthalmologist, a skin cancer specialist and a dentist.

"Doctors are an important part of my life," said Kessinger, a retired financial-services professional, who also is a Southern Baptist minister, an author of nine books and a songwriter of more than 20 songs. One of his songs — written with Cronin's encouragement — is "The Doctors Song," focusing on the issues doctors have with insurance reimbursement and how it affects patients.

Among the verses, Kessinger wrote: "At stake is access to the doctor you choose. An option you certainly don't want to lose." And: "What would we do if their practice fails? No one to go to, our health off the rails."

Kessinger said, when his neurologist retired, "it was a little difficult" for him to find another neurologist to be his doctor — a process that took several months.

Cronin said the 2024 Medicare cuts "illustrate physicians’ long-time frustration with Medicare. While hospitals and other providers routinely receive inflation-adjusted rates, physicians are facing real payment cuts. The failure of Medicare physician payments to keep up with inflation is the greatest threat to maintaining seniors’ access to care."

Dave Berman is business editor at FLORIDA TODAY. Contact Berman at, on X at @bydaveberman and on Facebook at

This article originally appeared on Florida Today: Independent physicians fear impact of cuts in Medicare reimbursements