December 20, 2021
This article originally appeared in Orthopedics This Week on December 20, 2021.
A new report from the American Medical Association has revealed the dramatic changes in Medicare spending since the onset of the COVID-19 pandemic.
The American Medical Association report is titled, “Impacts of the COVID-19 Pandemic on 2020 Medicare Physicians Spending.” The report revealed changes that occurred as people postponed or went without health care services as the COVID-19 pandemic progressed during 2020.
In 2019, Medicare physician fee schedule (MPFS) spending totaled $95 billion. According to the report, spending for 2020 was expected to hit $96.9 billion. It totaled only $82.9 billion, representing a 14% “cumulative reduction” in spending relative to expected.
The report also looked at month by month spending. MPFS spending “dropped sharply in mid-March.” Notably, “[f]or the period from March 16 through June 30 of 2020, MPFS spending was 32 percent less than expected and this period accounted for about two-thirds of the $13.9 billion estimated impact of COVID-19 in 2020.”
Not all areas were affected equally. The report revealed that “impacts varied considerably by place of service, particularly in the early months of the pandemic.” Markedly, in April 2020 the report highlighted a 90% drop in spending in ambulatory surgical centers.
In 2020, per the report, orthopedic surgery MPFS spending was $3.175 million when it was expected to be $3.762 million. The actual MPFS spending in 2020 represented a 16% reduction in spending relative to expected.
Telehealth spending was one area highlighted by the report. Prior to the pandemic, telehealth services “accounted for less than 0.1 percent of total MPFS spending.” In April 2020, telehealth spending increased to more than 16% of the MPFS toral.
During 2020, telehealth spending totaled $4.1 billion. This represented 5% of the MPFS total. In 2020, MPFS telehealth spending totaled $20 million for orthopedic surgery. Twelve million of that total was spent from March 16, 2020 to June 30, 2020. None of the orthopedic surgery MPFS telehealth spending occurred in the first quarter of 2020.
This decrease in Medicare spending added to the economic pressures that had been weighing on independent orthopedic practices, which already struggled to collect everything they were owed from insurance companies due to ever-increasing requirements and administrative demands.
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