New AMA Reports Document Financial Impact of COVID-19 on Physician Practices

March 17, 2021

Earlier this month, the American Medical Association (AMA) released two comprehensive reports on the impact of COVID-19 on physician practices. The first report documents Medicare physician spending data in the first six months of 2020 and the second describes data collected from a nationwide survey of physicians in July and August of 2020. 

The Medicare Physician Fee Schedule spending report indicates that spending was at a low of 57% less than average for the week ending April 10 and steadily picked back up in the coming weeks. However, spending was still 12% below average by late June. This drop impacted all major types of services, but most significantly impacted imaging, procedures and tests. For PM&R specifically, there was a 20% reduction in Medicare Physician Fee Schedule spending in the six-month period of January-June 2020.  This is lower than the average reduction of 19% across all specialties. 

The physician survey report documents that the majority of physicians indicated their revenue was still lower than pre-pandemic in July and August of 2020. It also suggests that while telehealth was heavily utilized, it did not offset reduced in-person patient visits. The high costs of PPE were also documented by the survey. Finally, the survey documented that while federal financial relief was helpful for many, it did not always solve revenue issues.

The AMA’s reports suggest that the road to recovery, particularly for smaller physician-owned practices, remains difficult.  However, the reports do not analyze data for the second half of 2020 and more information will be needed to assess recovery long term.