RFK Jr. weighs major changes to how Medicare pays physicians

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RFK Jr. weighs major changes to how Medicare pays physicians
Kennedy and advisers say the system drives doctors to perform costly surgeries rather than combating chronic disease.


Medicare’s payment formula rewards medical providers for surgeries and other costly procedures rather than for prevention and primary care. (Spencer Platt/Getty Images)

By Dan Diamond
Updated November 21, 2024 at 6:35 p.m. EST | Published November 21, 2024 at 5:24 p.m. EST

Robert F. Kennedy Jr. and his advisers are considering an overhaul of Medicare’s decades-old payment formula, a bid to shift the health system’s incentives toward primary care and prevention, said four people who spoke on the condition of anonymity to discuss private deliberations.

The discussions are in their early stages, the people said, and have involved a plan to review the thousands of billing codes that determine how much physicians get paid for performing procedures and services.

The coding system tends to reward health-care providers for surgeries and other costly procedures. It has been accused of steering physicians to become specialists because they will be paid more, while financial incentives are different in other countries, where more physicians go into primary care — and health outcomes are better.

Although policymakers have spent years warning about Medicare’s billing codes and their skewed incentives, the matter has received little national attention given the challenge of explaining the complex issues to the public, the technicalities of billing codes and the financial interests for industry groups accustomed to how payments are set.

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By Dan Diamond
Dan Diamond is a national health reporter for The Washington Post. He joined The Post in 2021 after five years at Politico, where he won a George Polk award for investigating the Trump administration's response to the coronavirus pandemic.follow on X @ddiamond