Doctors have become de-facto government contractors—and they’re discovering that means less autonomy.
First: the money. The Physician Fee Schedule (PFS) is budget-neutral by statute. When code revaluations or new codes would increase total Part B spending by more than a small threshold, CMS must lower the conversion factor (CF) so overall spending stays flat. (More patients alone doesn’t trigger this; it’s the RVU/code changes that do.)
When the PFS launched in 1992, the CF was about $31 per RVU. Today it’s about $32, essentially flat in nominal dollars and far lower in real terms (roughly one-third below 2001 after inflation). Meanwhile hospitals are paid under their own fee schedules with annual “market basket” inflation updates (minus a productivity adjustment), so their base rates track inflation better than the PFS.
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