As a CEO of Athens (Ga.) Orthopedic Clinic, I’m concerned about Medicare cuts to physician fees. AOC has served North Georgia for 60 years, and holds a significant responsibility with over 230,000 patients under care.
I recently met with CMS Administrator Mehmet Oz, MD, Sept. 14 to share my concerns with the proposed cuts to the Medicare physician fee schedule in 2027. During the meeting, I thanked Dr. Oz for serving in the hardest job in the healthcare industry and expressed my appreciation for the first net increase to orthopedic surgeons in many years in the 2026 fee schedule.
While the math was different from prior years, the 2026 fee schedule increased net Medicare payments to AOC by $300,000 in 2026 that rewarded physicians for providing MRIs, physical therapy, pain management injections and consultations in office (rather than other higher cost settings).
This 2026 2.5% increase was characterized as “temporary” adjustment as passed through the One Big Beautiful Bill Act, according to AOC’s report on the 2026 Medicare physician schedule.
For 2027, the proposed Medicare rate changes are as follows: under Medicare Part A, hospitals will see an inpatient increase of 1.7%; under Part B, ASCs will see an increase of 2.4%, HOPDs an increase of 2.4%, and physicians will see a 1.2% decrease, with “same day services” down 50%, and joint replacement surgery is slated for a 20% decrease.
Funding a 2.4% increase to HOPDs in 2027 by cutting physician reimbursement under Medicare Part B is not good, and only accentuates the increased shortage of physicians who cannot sustain further cuts.
I said during the meeting the continued cuts to physician reimbursement force physicians to seek hospital employment or professional services agreements.
I also said such a decision not only increases Medicare costs by up to 20% with the shift from in-office to hospital-based pricing, the cost to the private insurer (and their client, the private business) can increase by up to 50% or more — and that’s bad for the business community.
Looking forward, there are multiple options to avoid physician cuts:
- Extend the 2.5% temporary adjustment installed in 2026 through 2027 to allow more time to plan a viable solution.
- Expand the incentive introduced in 2026 to perform more work in physician offices to the ASC setting in 2027. This would include increasing physicians reimbursement by 3%+ for any orthopedic surgery performed in ambulatory surgery centers — as an example (with flat reimbursement for the same work performed in hospitals). Such an approach creates alignment to reward physicians for working in lower cost settings — and results in a net overall savings to Medicare Part B by shifting cases from higher cost hospital settings.
- Reallocate the Medicare Part B budget from higher cost hospital outpatient services to fund increases to physicians.
Long-term options become more complex
Ultimately, the long-term viability of Medicare likely requires a funding solution. Medicare Part A has been funded by a payroll tax since its inception in 1966, creating a clear revenue source to support the hospital inpatient expenditures. Medicare Part B is funded through the massive general fund of tax revenues that supports many important services which span well beyond healthcare. An aging population will continue to exponentially impact Medicare expenditures.
The time is nearing to challenge the House Ways and Means Committee — the body that passed the payroll tax funding for Medicare Part A over 60 years ago — to either increase the payroll tax to fund consistent physician increases, or to create a new taxation policy that will sustain physician reimbursement under Medicare for the long term. Medicare Part B should have been addressed 60 years as part of Part A funding and it is time for a new approach.
Until then, physicians can and should receive annual increases under Medicare either via continued temporary adjustments, reallocation of Part B funds, or through continued incentives to perform more work in the office or ASC setting.
Mr. Boblitz is CEO of Athens Orthopedic Clinic. AOC is northeast Georgia’s largest provider of orthopedics and sports medicine, serving more than 230,000 patients annually. With a team of 79 physicians, advanced practice providers and outpatient therapists, AOC offers comprehensive orthopedic services including joint and spine care, ambulatory surgery, imaging, physical therapy, urgent care and occupational medicine. AOC physicians also serve as teaching faculty with the Medical College of Georgia in Augusta and the University of Georgia School of Medicine in Athens. Learn more at www.athensorthopedicclinic.com.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
