CMS Physician Fee Cuts In the Face of Inflation

Physician Fee Cuts In the Face of Inflation:

2023 Medicare Physician Fee Reduction Makes Office-Based Surgery Even More Advantageous for Surgeons

A 2023 Physician Fee Schedule released by the Centers for Medicare and Medicaid Services (CMS) stated that physicians should expect a 4.4% Medicare reimbursement cut in surgeon professional fees heading into the new year. This is in addition to the 4% reduction in Medicare spending that occurred from the COVID relief package. An 8.4% cut is difficult in a normal year but is extremely painful in the face of record inflation rates at 7.7% as of October 2022. The combination of these factors and ophthalmic surgeons are faced with double-digit pay cuts. 

When Will The Fee Cut Take Place?

Unless Congress steps in, the new fee schedule will take effect on January 1, 2023.

Exactly How Much Is Being Cut?

The reality of a 4.4% physician fee cut could be compounded by the expiration of cuts allocated by the American Rescue Plan in 2021. 

The $1.9 trillion COVID-19 relief package passed in March 2021 (the American Rescue Plan Act) caused a 4% reduction in Medicare spending, amounting to approximately $36 billion in cuts. At the end of 2021, Congress deferred action on waiving Statutory PAYGO, which is supposed to keep fee reductions or budget cuts from exceeding 4%. However, these provisions are set to expire at the start of the new year.  When this cut is factored into the overall equation, the deficit in reimbursements could increase to as much as 8.4%. Combine this with the 7.7% inflation rate and ophthalmic surgeons are looking at a 16.1% pay cut moving into 2023. 

What Does This Mean For Ophthalmologists?

What can be done about it? Physicians can increase their daily patient census, lay off staff, or move further in the direction of self-pay but these all have their limitations and drawbacks. Finding ways to gain more control over the surgical environment and generate more ancillary revenue may be the best way to offset fee cuts and adapt to inflation and other external factors. 

Ophthalmologists that are performing surgery in the office are better poised to offset the loss as they receive an enhanced professional fee in lieu of a facility fee.

Rather than surrendering an additional 8.4% in costs to Medicare cuts, surgeons using an OBS model retain 100% of their fees and avoid the financial impact of increased inflation (see chart below).

OBS physician fee

What Is Office-Based Surgery?

Office-based surgery, or OBS, is any surgical procedure performed by a licensed physician in the office setting, requiring some level of anesthesia.

As surgeon fees continue to decrease, more and more cataract surgeons are turning to OBS as a way to stabilize their bottom line while dramatically increasing patient comfort and closing the gap in procedure wait times. Over 40,000 ophthalmic procedures have been successfully performed in the office-based setting.1.2

What Are the Benefits of Office-Based Surgery?

With as little as 500 square feet, you can incorporate an in-office surgery suite in just a couple of months. Many physicians report an increase in patient retention, greater revenue streams, more reliable daily schedules, and a decrease in patient anxiety. 

But one of the most important components of transitioning to OBS is having a knowledgeable industry partner to help you facilitate the transition.

By assuming total responsibility for everything from OBS space planning, development, materials management, revenue cycle management assistance, compliance, governance/accreditation, and staff training to daily operations assistance the team at iOR gives you the freedom to focus on what you do best: performing surgery. 

When utilizing iOR Partners, a team of experts will oversee all of the details of the office-based suite to permit seamless integration of clinic and surgery. In as little as 90 days, you can implement an iOR office-based surgical suite and retain surgical revenues within your practice. 

Are you considering a transition to OBS and retaining all surgical fees?


1.  Ianchulev T, Litoff D, Ellinger D, Stiverson K, Packer M. “Office-Based Cataract Surgery.” Ophthalmology, Volume 123, Issue 4, P723-728, April 01, 2016.

2.  iOR occurrence data published quarterly from iOR Suites nationwide: