Association Between the Declining Conversion Factor and Access to Care for Medicare Beneficiaries

Area of Science:

• Health Economics
• Health Services Research
• Health Disparities

Background:

• Medicare maintains budget neutrality via physician fee schedule conversion factor adjustments.
• Reduced reimbursement may negatively impact Medicare beneficiaries' access to care.
• Existing research often overlooks socioeconomic disparities in care access related to reimbursement changes.

Purpose of the Study:

• To investigate the association between inflation-adjusted Medicare conversion factor declines and changes in care utilization among diverse socioeconomic subgroups.
• To quantify care-utilization gaps across urbanicity, income, and area deprivation levels.
• To assess the impact of conversion factor trends on these disparities over time.

Main Methods:

• Analysis of a 5% national sample of Medicare fee-for-service claims (2005-2023).
• Comparison of care utilization rates between metropolitan/rural, high/low-income, and least/most deprived (Area Deprivation Index) communities.
• Normalization of utilization rates and calculation of utilization gaps using multivariable logistic regression.
• Assessment of temporal association between gap size and inflation-adjusted conversion factor using linear regression.

Main Results:

• Care utilization gaps widened significantly between 2005-2023 for urbanicity (1.76%), community-income (5.89%), and ADI (3.82%).
• The 48.3% decrease in the inflation-adjusted conversion factor (2005-2025) was linked to increased utilization gaps (2.46% urbanicity, 7.00% income, 5.31% ADI).
• Disparities were most pronounced in family practice, with gap increases of 21.31% (urbanicity), 14.02% (income), and 19.55% (ADI).

Conclusions:

• Medicare's budget neutrality policies, through conversion factor reductions, appear to exacerbate access-to-care disparities.
• These findings highlight potential negative consequences for traditionally underserved populations.
• Policy interventions may be needed to mitigate widening health inequities driven by reimbursement changes.