Chapter 4 - Physician and other health professional services - Recommendation and assessment of payment adequacy

Sep 21, 2026

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Chapter 4 evaluates payment adequacy for physician and other health professional services in fee-for-service (FFS) Medicare. It summarizes how the physician fee schedule covers thousands of service types across care settings and estimates spending levels, clinician participation, and access to care in 2024. It also reviews whether payment indicators remain positive despite elevated input cost inflation, and discusses trends in clinician workforce composition, service volume, and quality measures from 2023 to 2024.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages54

Reading Time2 h 16 min

AccessFree to download

Chapter summary

Assessment of payment adequacy

Beneficiaries’ access to care

Other surveys on clinician participation and billing

Clinician workforce supply trends

Service volume and spending growth

Quality of care

Clinicians’ revenues and costs

C H A P T E R 4 Physician and other health professional services | | | --- | |

R E C O M M E N D A T I O N
4 For calendar year 2027, the Congress should increase payment rates for physician and
other health professional services by 0.5 percentage points more than current law.
COMMISSIONER VOTES: YES 15 • NO 2 • NOT VOTING 0 • ABSENT 0 | | | C H A P T E R4 Physician and other health professional services Chapter summary In 2024, traditional fee-for-service (FFS) Medicare’s physician fee schedule (PFS) paid for about 9,000 types of medical services provided by clinicians across a variety of care settings. These services included office visits, surgical procedures, imaging, and tests delivered in physician offices, hospitals, skilled nursing facilities, and other settings. The clinicians who are paid to deliver these services include not only physicians, advanced practice registered nurses (APRNs), and physician assistants (PAs) but also chiropractors, physical therapists, psychologists, and other types of health professionals. The Medicare program and its beneficiaries paid $93.8 billion in 2024 for fee schedule services billed by about 1.5 million clinicians, accounting for just over 15 percent of spending in FFS Medicare. Spending on clinician services by FFS Medicare and its beneficiaries was $1.4 billion higher in 2024 than in 2023, representing a 1.5 percent increase in total spending. This increase is largely attributable to 4.1 percent growth in spending per FFS beneficiary, which was partially offset by a 2.5 percent decrease in the number of beneficiaries enrolled in FFS Medicare. Assessment of payment adequacy Based on our assessment of the latest available data, the Commission’s indicators ofthe adequacy of clinician payments have remained positive In this chapter • Are FFS Medicare payments adequate in 2026? | • How payment rates are updated | | --- | | • How should FFS Medicare | | payments change in 2027? | | • Appendix: Key findings from the Commission’s 2025 | | access-to-care survey | or improved since last year, although input cost inflation remains slightly elevated. Beneficiaries’ access to care—In the Commission’s 2025 survey, Medicare beneficiaries reported access to clinician services that was generally better than that of privately insured people. Our findings are consistent with findings of other national surveys, which have found that people ages 65 and older (almost all of whom have Medicare coverage) report better access to care than younger adults; Medicare beneficiaries of any age are also more likely than privately insured people to rate their insurance coverage positively. Other surveys indicate that the share of clinicians accepting Medicare is comparable with the share accepting private insurance, despite private health insurers’ higher payment rates. And almost all clinicians who bill Medicare accept PFS amounts as payment in full and do not seek to increase total payments for fee schedule services by balance-billing beneficiaries up to a limiting charge as “nonparticipating” providers. In addition, very few clinicians forgo all Medicare payments by electing to “opt out” of the program; these clinicians may collect the full amount they charge to patients. The supply of most types of clinicians billing Medicare’s PFS has been growing in recent years, although the composition of the clinician workforce continues to change. Over the last several years, the number of primary care physicians billing the fee schedule has slowly declined, the number of specialists has steadily increased, and the number of APRNs and PAs has climbed rapidly. The number of clinicians per FFS beneficiary has grown, partially because of a decline in the number of FFS beneficiaries. Interest in becoming a clinician remains high. Over the last 40 years, the number of applicants to U.S. medical schools has grown, exceeding population growth, and applicants to medical school co

FAQs

What does Chapter 4 cover regarding physician and other health professional services?

It focuses on how FFS Medicare’s physician fee schedule pays for a wide range of clinician services, and it evaluates whether clinician payment is adequate based on indicators, spending, access, and quality measures.

How does the chapter describe changes in spending and service volume from 2023 to 2024?

It reports spending on clinician services rising in 2024, with growth largely driven by increased spending per FFS beneficiary. It also notes faster growth in the number of clinician services per beneficiary from 2023 to 2024 compared with earlier years.

What does the chapter say about beneficiaries’ access to clinician services and quality?

It states that access in the Commission’s 2025 survey was generally better for Medicare beneficiaries than for privately insured people, and quality indicators such as ambulatory care-sensitive hospitalizations and emergency department visits remained relatively stable compared with pre-pandemic levels.

Sep 21, 2026

Uploaded by Dozel