Impact of COVID-19 on Trends in Physician Payments from Traditional Medicare from 2017–2021

INTRODUCTION

Physicians, especially primary care, likely faced substantial revenue loss during the COVID-19 pandemic due to decreases in patient volume and deferred healthcare utilization.^1–3 While studies have focused on projections and limited surveys, the impact of the pandemic on physician revenue is unclear.^1–3 We examined trends in physician revenue from traditional Medicare, and variations by physician specialty and geography.

METHODS

We used descriptive statistics to analyze physician payments using the publicly available Medicare Physician & Other Practitioners by Provider⁴ data from 2017–2021. These data include clinicians that annually bill traditional Medicare for ≥ 11 beneficiaries. We compared total payments (total amount Medicare paid) between primary care physicians (internal medicine, geriatric medicine, family/general medicine, and preventive medicine) and specialists (all other physicians). We excluded non-physician clinicians and pediatricians. We also examined payments by physician gender, state, and population density (Rural–Urban Commuting Area (RUCA) primary codes). RUCA codes 1–3 were classified as metropolitan (> 50,000 people) and 4–10 as rural. We further categorized rurality as isolated (< 2,500 people; RUCA 10), small town (2,500–9,999 people; RUCA 7–9), and micropolitan (10,000–49,999 people; RUCA 4–6).

RESULTS

Between 2017–2018, payments remained stable across physician and geographic characteristics. Between 2019–2020, there was an average loss of $7,416 (-9.92%) in Medicare payments for primary care physicians and $12,379 (-8.72%) for specialists. Internal medicine, geriatric, and family medicine physicians had similar losses between 2019–2020, ranging from -10% to -11%. By 2021, payments largely rebounded to 2019 levels, ranging between -0.22% for primary care physicians and -2.90% for specialists. Family medicine was the only primary care subspecialty to exceed 2019 payments in 2021 (3.1%; Fig. 1).

Figure 1.

Average medicare payments to physicians, 2017–2021*. *Total number of physicians: 2017 = 575,118; 2018 = 578,417; 2019 = 581,331; 2020 = 576,293; 2021 = 598,496.

The average percent changes in payments between 2019–2020 were similar for male and female physicians; by 2021, females experienced greater recoveries than males (Fig. 1). Rural physicians experienced more sustained deficits than their metropolitan counterparts. For example, rural primary care physicians experienced a larger reduction in 2021 (-3.66%) compared to metropolitan primary care physicians (0.26%); a similar trend was observed with specialists (-6.68% rural and -2.71% metropolitan). This pattern was more pronounced in areas with greater rurality: isolated areas were the slowest to recover by 2021 (Fig. 1). Geographic patterns were consistent across primary care and specialist physicians: New England, Midwest, and Pacific Northwest states experienced larger declines in payments between 2019–2020 compared to other Western states (Fig. 2).

Figure 2.

Geographic Variation in the Average Change of Medicare Payments to Physicians, 2019 to 2021.

DISCUSSION

Payments from traditional Medicare decreased substantively from 2019–2020, likely due to COVID-19-related decreases in patient visits. Federal responses – including relief through the CARES Act – may have offset deficits experienced by physicians in 2020.^2,5,6 By 2021, payments had largely rebounded for both primary care and specialist physicians, but recovery was uneven when compared to 2019. Although physicians in primary care subspecialties experienced losses at similar rates between 2019–2020, family medicine physicians surpassed their 2019 Medicare payments in 2021. Rural physicians continued to experience a decrease in Medicare payments in 2021. Given rural settings already struggle with an inadequate supply of specialist and primary care physicians, physicians in these settings may be at risk for worsening shortages, consolidations, or closures, and may need ongoing support. Recovery in traditional Medicare payments could have been impacted by the Medicare physician fee schedule changes in 2020 (i.e., increase in relative value unit of some codes), such that coding changes boosted overall payments implying greater recovery than would have been observed otherwise.

Our study has limitations. Importantly, we only capture a fraction of physician payments since our analyses do not include revenue from commercial, Medicaid, or Medicare Advantage payers. Given Medicare Advantage’s program growth; we would expect this to have slowed the rebound of payments from traditional Medicare. With expiring COVID-19 relief funds⁶ and factors such as workforce shortages and increased operational costs, physicians may still be struggling financially which may not be captured by Medicare payments.⁷ Nonetheless, Medicare payments represent an important share of total revenue for physicians.¹

Physicians – especially rural and primary care physicians – continue to experience declines in Medicare payments. This is concerning given their steep clinical challenges: maldistribution of clinicians, workforce shortages, an increasingly complex and aging patient population, and low payments compared to procedural-based specialties.⁷ Adequate revenue for rural and primary care physicians is critical to ensuring patients have access to high-quality care.

Authors’ Contribution:

No additional contributors.

Funding

Support for this research was provided by the Commonwealth Fund (Grant ID: 2022–4022).

Data Availability

The datasets analyzed during the current study are available from Medicare Physician & Other Practitioners - by Provider | CMS Data. https://data.cms.gov/provider-summary-by-type-of-service/medicare-physician-other-practitioners/medicare-physician-other-practitioners-by-provider.

Declarations:

Conflict of Interest:

This work was supported by The Commonwealth Fund (CWF), a national, private foundation based in New York City that supports independent research on health care issues and makes grants to improve health care practice and policy. The manuscript’s contents are solely the responsibility of the authors and do not represent the official views of the study funders. C.L was employed by CWF during this study.