Medicare Spending Down $9.4B in First Half of 2020, AMA Survey Finds

During the first half of 2020, Medicare physician spending associated with the COVID-19 pandemic was reduced by an estimated $9.4 billion (19 percent), according to a recently released AMA survey.

The report “Changes in Medicare Physician Spending During the COVID-19 Pandemic” provides an in-depth look at impacts of the COVID-19 pandemic on physicians. Using Medicare claims data, the report documents changes in Medicare Physician Fee Schedule (MPFS) spending during the first six months of 2020.

Key findings from the report include:
•    MPFS spending dropped sharply in March and April of 2020, falling as much as 57 percent below expected.
•    Although it recovered from the April low, MPFS spending at the end of June 2020 was still 12 percent less than expected.
•    By specialty, impacts on total spending for the first six months of 2020 ranged from a 6 percent reduction for nephrology to a 29% reduction for ophthalmology and a 34 percent reduction for physical therapists.
•    Telehealth spending increased from less than 0.1 percent of total MPFS spending prior to the pandemic to more than 16 percent in April 2020 but was concentrated in a handful of service categories.

Even with eased telehealth coverage restrictions, telehealth services did not offset reduced in-person patient visits. 
•    81 percent of physicians were still providing fewer in-person visits when surveyed in July and August of 2020 than pre-pandemic. The average in-person visits fell from 95 to 57 per week.
•    At the height of use, weekly telehealth visits were almost five times higher than pre-pandemic.
•    At the time of the survey, weekly telehealth visits were still almost three times higher than pre-pandemic levels.
•    Almost 70 percent of physicians, despite telehealth increases, were still providing fewer total visits (in-person and telehealth) at the time of the survey than pre-pandemic. The average total visits fell from 101 to 72 per week.

The AMA commissioned the nationwide survey of patient care physicians in July and August of 2020 to assess the financial impacts of the pandemic. The results are based on the responses of 3,500 physicians. Of those surveyed, 81 percent said revenue was still lower than pre-pandemic. The average reported drop in revenue was 32 percent.