Physician Association of California Warns Proposed Medicare Cuts Could Force Independent Practices to Close

SACRAMENTO, Calif. — The Physician Association of California (PAC) is urging the federal government to withdraw a proposal it says could accelerate the closure of independent physician practices across the state.

The Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees Medicare, has proposed cutting payments by 50 percent for certain services, such as an office visit, when a physician provides them on the same day as a procedure. Unfortunately, this change would disproportionately hurt independent physicians, whose Medicare payments must cover the full cost of operating their practices.

“Independent physicians will absorb this cut hardest,” said Omer Deen, chair of PAC’s board of directors and founder of the Deen Medical Group. “Unlike hospital-employed physicians, independent doctors rely on their professional fees to pay for staff, supplies, equipment and malpractice insurance. Those costs won’t shrink just because Medicare payments do.” 

CMS argues the cut is justified because Medicare may be paying twice for work that is included in both the office visit and the procedure. But CMS has not explained what specific work is being paid for twice or how often that actually happens. The proposed cut would leave independent physicians with significantly less reimbursement for caring for those patients, even as the costs of running their practices remain the same.

Small and independent physician offices continue to shrink. In California, only about 30 percent of practicing physicians are independent. Over a decade ago, the number was closer to 50 percent. The proposal by CMS would lead to further decline in these numbers, especially when compounded by other proposed cuts in the 2027 Medicare Physician Fee Schedule, which is the annual document setting how much Medicare pays physicians for a variety of services.

Additional closures of small and independent practices leads to patients experiencing delayed appointments, longer travel for care, and higher costs. 

PAC proudly joins national and state medical organizations in asking CMS to withdraw this proposal and protect independent physicians and patients who can’t afford to lose their care.