The Impact of COVID-19 on Medicare Health Services and Payments


Beginning in mid-March 2020, the COVID-19 pandemic has had an unprecedented impact on health care utilization. The impact on patients, their families and the health care system was significant. Most health care providers have faced a significant reduction in volume as elective services were suspended and patients may have been reluctant to seek care, even for needed treatment and diagnosis services. This brief uses Medicare fee-for-service (FFS) beneficiaries’ claims to track patient service utilization and payments to providers during the first half of 2020. In the Medicare FFS population, health service use and payments fell sharply in mid-March, bottomed out in mid-April, and began to rise again in May and June. Part B payments fell the furthest in March. Overall, utilization and payments in major service categories is still somewhat below 2019 levels and cumulative aggregate year to date deficits range from 12% - 16% to date. Despite these overall trends, there is substantial variation across service types and geographies. It is unclear how much of the reduction in health service use and spending will be recovered in the second half of the year.

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