2020 saw Medicare spending drop, telehealth scooping larger cut of budget, report says: 7 takeaways

Medicare saw a 14 percent dip in anticipated payments to physicians in 2020, but telehealth simultaneously stepped into the limelight to make up a larger share of Medicare spending, according to an American Medical Association analysis

Seven takeaways:

1. Medicare spent $82.9 billion on physicians in 2020, a $12.1 billion decrease from 2019. Figures in 2020 were 14 percent lower than the anticipated spending of $96.9 billion. 

2. The majority of spending drops came from evaluation and management (down 49 percent from expected spending) and imaging, procedures and tests (down 65-70 percent from expected spending). 

3. Telehealth grew from making up 0.1 percent of Medicare physician spending before the pandemic to 5 percent of spending in 2020. 

4. About 29 percent of Medicare fee-for-service enrollees received care via telehealth in the second quarter of 2020. Ten percent exclusively used telehealth for physician services. 

5. However, as the pandemic progressed, members with an established provider relationship used telehealth less.  

6. Telehealth has been the preferred delivery method for about half of all mental healthcare since the pandemic began. 

7. Among specialties, endocrinology (20 percent of Medicare spending), rheumatology (13 percent of Medicare spending) and primary care (10 percent of spending for family medicine, 8 percent of spending for internal medicine) had significant telehealth use.

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