Gastroenterology practices face mounting pressure on multiple fronts, from Medicare reimbursement uncertainty to rising administrative workloads.
Leaders warn the cumulative strain and tightened operating margins are pushing more GI groups toward consolidation, employment and hospital partnerships.
1. Medicare payment cuts and reimbursement uncertainty
Gastroenterologists are raising concerns about CMS’ finalized payment policies, warning that reimbursement instability will affect both access and quality.
The conversion factor for practitioners participating in a qualified alternative payment model is $33.56, a 3.77% increase. For non-QPM practitioners, the conversion factor is $33.40, a 3.26% increase. Additional adjustments include a 2.5% one-year increase under the One Big Beautiful Bill Act and a 0.49% increase tied to finalized changes in work relative value units.
“We are extremely frustrated that CMS chose to forge ahead on a policy that ACG and other stakeholders conveyed is misguided and not based on any data,” Amy Oxentenko, MD, immediate past president of American College of Gastroenterology, told Becker’s. “CMS is choosing speed over quality, which — together with other policies affecting GI services in ASCs and hospital outpatient departments — will significantly impact reimbursement and quality of care.”
Meanwhile, Medicare payments to physicians for GI procedures such as colonoscopies and EGDs declined sharply between 2018 and 2023, with inflation-adjusted cuts of more than 22% for both procedures, according to a 2024 report in the American Journal of Gastroenterology. Reimbursement for ASCs and hospital outpatient departments either increased slightly or remained steady over the same period — widening the gap between physician and facility payment.
Between 2018 and 2023, Medicare payments to physicians for gastrointestinal procedures such as colonoscopies and esophagogastroduodenoscopies also declined significantly, with inflation-adjusted cuts of over 22% for both procedures. In contrast, reimbursements to ASCs and hospital outpatient departments either increased slightly or held steady during the same period, creating a widening financial gap between physician and facility payments.
Declining reimbursement is already affecting practice stability, with 76% of gastroenterologists saying reduced payer reimbursement is negatively impacting their practice, according to a Medscape report published Dec. 12.
2. Growing administrative and staffing burdens
Gastroenterologists are also contending with rising administrative work and staffing costs.
About 8 in 10 gastroenterologists said their administrative workload increased at least somewhat over the past three years, citing EHR documentation, paperwork and prior authorizations. About 70% said rising staffing costs are negatively affecting their practices, selecting a four or higher on a five-point scale.
3. Payer disruptions and shifting expectations
As payer expectations evolve and reimbursement pressures grow, GI leaders are rethinking how they engage insurers, especially around contract renegotiations, value-based care and patient education.
“The biggest shift in our strategy with payers has been trying to renegotiate some of the contracts we have, especially with our biggest commercial payers,” Pradnya Mitroo, MD. president of Fresno (Calif.) Digestive Health, told Becker’s. “For the future, data-driven negotiation will be very important. We plan on using cost and outcome data to show insurers that we can deliver care more cost effectively than hospitals and with better quality and higher patient satisfaction.”
Dr. Mitroo noted her group recently secured coverage for a second same-session procedure, such as reimbursing an EGD performed alongside a colonoscopy.
Leaders are also preparing for continued consolidation and vertical integration among payers.
“Looking ahead, we’re preparing for continued consolidation and payer vertical integration by strengthening our scale and negotiating position — not just through size, but through demonstrable quality, operational consistency and patient satisfaction,” Geogy Vennikandam, MD, chief operating officer of Chicago-based GI Partners of Illinois, told Becker’s. “Our aim is to be a high-performing GI partner of choice for value-based contracts.”
4. Independence is becoming unsustainable
Gastroenterology is also seeing the broader shift toward employment models, as many practices struggle to sustain independent operations, particularly for ASCs.
Michael Warne, CEO of Associated Gastroenterologists of Central New York in Camillus, told Becker’s that financial pressures are pushing some ASCs to explore hospital partnerships for stability and leverage.
“With flat reimbursement and rising costs across the board, it’s getting harder to make the numbers work,” Mr. Warne said. “In some cases, teaming up with a hospital … can help — mainly because they have more leverage with insurance companies and deeper pockets to cover big-ticket expenses like anesthesia.”
Surinder Devgun, MD, managing partner of Rochester (N.Y.) Gastroenterology Associates, said the economic pressures are accelerating consolidation and employment.
“As costs increase and income remains static, there is an inflection point where providers in small practices either take a pay cut as a sacrifice for independence, exit the workforce (such as early retirement or alternate non clinical employment) or join a larger entity,” Surinder Devgun, MD, managing partner of Rochester (N.Y.) Gastroenterology Associates, told Becker’s. “Therefore, joining a larger entity is the most likely outcome in order to remain in clinical practice.”
