Medicare Reimbursement Rates: Too Much or Too Little? What Are Our Options?

Abstract

In recent decades, Medicare reimbursement rates have continued to fall behind general inflation rates while the number of beneficiaries has continued to rise. To compensate for lagging Medicare and Medicaid rates, cost shifts have increased the financial burden on private payers and patients. With impending increases in inflation caused by current historical events, reform is necessary. Otherwise, increasing number of physicians will likely be forced to limit the number of Medicare patients in their practices. However, the 2022 annual March Report released by MedPAC continued to recommend that Congress freeze physician payments in 2023. Various policy solutions have been considered, including single-payer systems, all-payer systems, and public options. Examples of such systems exist in specific states, including Maryland, Washington, and Colorado, and can provide insight on how these policies might fare if applied to the entire country. Overall, Medicare needs reform involving a stronger focus on a pay-for-value approach.