Growing bipartisan support for Medicare reform in the U.S. House of Representatives is clear evidence that our sustained physician advocacy is moving us closer to fixing our badly broken physician payment system.
A “dear colleague” letter (PDF) signed by 233 Republican and Democratic House members supports not only blocking the 2.8% payment cut for physicians treating Medicare patients due to take effect on Jan. 1, 2025, but also calls for a permanent annual update tied to the Medicare Economic Index (MEI) that reflects the increasing cost of delivering patient care. The 2.8% reduction is compounded by the fact the current cost to maintain a physician practice is increasing by 3.6%, as measured by that same MEI.
This letter is a direct result of physician-led advocacy by the AMA and dozens of state and specialty societies across the country whose members have been significantly impacted by declining Medicare reimbursement.
Both of the reform measures called for in the letter—stopping the payment cut and adding an inflation-based update—are critically important in maintaining patient access to Medicare. Unless Congress acts during the coming lame duck session, 2025 will mark the fifth consecutive year of payment cuts for physicians, and extend a devastating decline in Medicare physician reimbursement that already stretches beyond two decades.
Consider that, adjusted for inflation, Medicare payments to physicians have plummeted by 29% since 2001. That means for a sizable number of physicians nationwide, the current rate of Medicare payment is lower—and some cases, far lower—now than it was when we graduated from medical school. And of course, the cost of maintaining a practice during that same time has soared.
Ensuring patient access to care
Physicians have been paying the price for a broken Medicare payment system for far too long. That’s especially true for physicians like me in small, independent practices that have endured significant payment cuts in a time of steadily increasing practice costs, sometimes forcing us into difficult decisions to cut staff positions or limit the number of new Medicare patients we see.
Ensuring that physicians can maintain the fiscal viability of their practices through an inflation-based annual update is critical to ensuring patients have access to Medicare in the future. Taking that long-overdue action merely brings physicians into alignment with the rational and automatic yearly inflationary payment increases granted to hospitals, skilled nursing facilities and others who serve Medicare patients.
The 233 members of Congress supporting the latest call to action on physician payment reform recognize the ever-widening gap between the amount Medicare pays for care and costs physicians incur in providing it, and have committed themselves to supporting legislative action to close that gap.
An unsustainable Medicare physician payment system jeopardizes patients and puts physician practices at risk. Absent a rational and predictable Medicare payment system, physicians will continue to struggle to adequately pay staff in a competitive labor environment, acquire new equipment and make other investments, and maintain the financial viability of their practices.
All patients—not just Medicare patients—are put at risk when our flawed and outdated payment system forces physicians to close their doors. That risk is heightened for Medicare patients in rural and underserved areas of our nation. Add your voice to the chorus of patients and physicians calling for reform at FixMedicareNow.org.
It is no secret that our nation is experiencing deep political division over a broad range of issues. But the fact that a solid majority of House members are coming together at this moment to support a permanent fix to Medicare physician reimbursement reflects the urgency and depth of need for prompt and decisive action. Instead of gridlock, we have agreement. Instead of conflict, we have compromise. The stage is set to resolve a problem that has plagued physicians and patients for far too long.
The AMA stands ready to work with all interested parties to pass these crucial policy changes before the end of the year. Doing so will produce a financially viable and more predictable Medicare physician payment system that protects access to high-quality care where it is needed most. Congress must cancel the scheduled 2.8% payment cut, enact targeted reforms to budget neutrality requirements, and provide physicians with a payment system that truly reflects the cost of care.
