Physician Acceptance of New Medicare Patients Stabilizes in 2004-05

Originally published by the Center for Studying Health System Change (HSC), 2006.

Physician Acceptance of New Medicare Patients Holds Steady

Despite persistent concerns about the adequacy of Medicare physician payment rates, the proportion of physicians accepting new Medicare patients stabilized in 2004-05, according to HSC research. While some physician specialties reported declines in Medicare participation, the overall rate of physician acceptance remained relatively steady, suggesting that widespread access problems for Medicare beneficiaries had not materialized to the degree that some had feared.

The stability in physician acceptance rates coexisted with ongoing frustration among physicians about Medicare payment levels. Physicians reported that Medicare payments had not kept pace with the rising costs of running a practice, creating a growing gap between what Medicare paid and the actual cost of providing care. Many physicians were cross-subsidizing Medicare patients with revenue from privately insured patients, a strategy that worked only as long as they maintained a sufficient volume of private patients paying higher rates. The findings raised questions about the long-term sustainability of this arrangement, particularly if Medicare payment cuts under the sustainable growth rate formula were implemented.

Sources and Further Reading

Center for Studying Health System Change, "Physician Acceptance of New Medicare Patients Stabilizes in 2004-05" (2006).