Physicians increasingly exiting the Medicare program

Physicians are increasingly exiting Medicare, according to new research published in JAMA Health Forum. 

Radiology and other specialties have expressed concern in recent years that inadequate payment rates could push practices to close or stop accepting the federal program for seniors. Since 2001, Medicare reimbursements to physicians have fallen 33%, when adjusting for inflation, according to the American Medical Association. 

Researchers recently sought to test this theory, analyzing 100% of fee-for-service Medicare Part B claims logged between 2010 to 2024. They found the share of physicians exiting Medicare increased “significantly” from 1.8% to 3.6% by the end of the study period. 

“The findings may reflect multiple factors, including the greater burden of new communication methods (e.g., portal messages) and demands for clinical documentation,” Hannah T. Neprash, PhD, and Michael E. Chernew, PhD, healthcare policy experts with the University of Minnesota and Harvard Medical School, respectively, wrote July 18. “More rapid growth in exit[s] among small practices likely contributes to consolidated physician markets, given that new physicians increasingly work for large practices.”

Researchers excluded docs who on average billed for fewer than 100 Medicare claims annually. They defined an exit as the absence of any claims in the payment program for 12 consecutive months. Altogether, the study sample included over 791,000 physicians at an average age of nearly 45. Physician Medicare exits displayed a gradual increase from 2010-2013 before stabilizing between 2014-2016. They saw another gradual increase from 2017-2019 and then spiked amid the COVID-19 pandemic in 2020-2021 before returning to regular levels by 2023. 

As of that year, the exit rate for primary care physicians (4.41%) exceeded that of hospital-based (3.5%), surgical (2.99%) and other medical specialists (2.49%). Between 2010-2023, the age-adjusted share of PCPs exiting Medicare climbed by about 0.21 percentage points. That significantly exceeded annual exit growth among surgical (0.14), hospital-based (0.08) and other medical specialists (0.06). Exit rates in 2023 were lowest for physicians in solo practice (3.16%). However, annual growth in Medicare departures for solo practitioners (0.18 percentage points) exceeded those of both physicians in medium (0.15) and large group practices (0.08), the study found. 

“Decreased fees may also play a role but cannot explain the 2014 to 2016 stabilization in exit rates,” the authors speculated. “Variation in exit rates by specialty suggests that concern about inadequate PCP supply may be warranted but requires investigation.”