The continuing resolution that Congress passed early Saturday morning to keep the federal government operating into 2025 leaves entirely untouched the 2.83% across-the-board Medicare physician payment cut set to take effect Jan. 1.
“The continuing resolution utterly fails to address declining reimbursement rates for Medicare, pushing our health system down a path that will have predictable and deleterious results,” said AMA President Bruce A. Scott, MD, a Louisville, Kentucky, otolaryngologist in private practice. “For the fifth consecutive year, Congress has adjourned and allowed Medicare cuts. What will be the result? Patients struggling to access health care. Physicians closing or selling their private practices while others opt to leave the profession.
“Congress heads home today leaving in place a 2.83% cut for doctors,” Dr. Scott added. “It did not provide a rational permanent, inflation-based update as the Medicare Payment Advisory Commission recommended. It didn’t even offer doctors a Band-Aid in the form of a cut reduction, as the cost of delivering care rises 3.5% next year.”
He added that it is not just the coming year, or the last four years, that have seen Medicare physician payment cuts. When accounting for inflation, the trend has been happening since 2001.
“With this new cut going into effect next year, Medicare payment rates have fallen by 33% over the past two decades, when adjusted for the costs of running a practice, leaving physicians struggling to figure out how they can continue to provide needed care to their elderly and chronically ill patients.”
This latest congressional failure comes despite AMA’s leading the charge to reform the Medicare payment system to avoid what Dr. Scott has called an “oncoming crisis” in medical care.
That advocacy garnered bipartisan majority support (PDF) in the House of Representatives for leadership to “expeditiously pass legislative fixes” to stop the “harmful” pay cut and give doctors an update “that takes into account the cost of actually delivering care to patients.” That letter to congressional leaders also urged Congress to provide a positive payment update for 2025. Every state medical society signed on, as did 77 national medical associations.
The AMA’s Fix Medicare Now campaign this year generated over 60 million paid impressions, nearly 700,000 engagements, and almost 507,000 messages to Congress.
"Physicians are frustrated and patients are angry,” Dr. Scott said. “Obviously, the Medicare payment system is broken. With another cut almost certain to take effect, Congress must enact meaningful long-term reforms. The American Medical Association has put forward many substantive solutions and is eager to work with the new Congress and administration. Patients and physicians are counting on cooperation to reform Medicare and avoid a sixth year of last-minute cuts and a further hollowing out of access to care.”
The AMA is strongly encouraging physicians from around the country to come out in force for the AMA National Advocacy Conference in Washington, D.C., in February. The goal is to show Congress the real-life impact of the broken Medicare payment system on patients and on physician practices and the communities across America that doctors serve. Learn more and register now.
AMA is ready with solutions
To fix the problems with the nation’s largest single health care payer over the longer term, the AMA supports the bipartisan Strengthening Medicare for Patients Providers Act. That measure would give physicians with an annual Medicare payment update tied to the Medicare Economic Index.
The AMA also backs the bipartisan Provider Reimbursement Stability Act, which would reform the Medicare payment schedule budget-neutrality policies by, among other things, requiring the Centers for Medicare & Medicaid Services (CMS) to reconcile inaccurate utilization projections based on actual claims and prospectively revise the conversion factor accordingly.
And, in addition, with substantial input from national medical specialty societies and physicians across the country, the AMA has developed a statutory proposal to replace the Medicare Incentive-based Payment System’s (MIPS) tournament model of payment adjustments with a more sustainable approach tied to annual payment updates. The MIPS replacement, called the “Data-Driven Performance Payment System,” also would give CMS incentives to share data with physicians and improve the measures.
Such changes are needed to protect patients’ access to care in the U.S. health system already facing widespread doctor shortages.
Explore further with the AMA’s Medicare Basics series, which provides an in-depth look at important aspects of the Medicare physician payment system. With these six straightforward explainers on budget-neutrality rules, MIPS, the Medicare Economic Index and more, policymakers and physician advocates can learn about key elements of the payment system and why they are in need of reform.
“Golden opportunity” missed on prior auth
Follow the fight for Medicare reform
Stay up to date on how the AMA is fighting to reform the Medicare payment system for physicians—delivered to your inbox.
Another glaring omission from the continuing resolution is action on a separate health care issue with majority bipartisan support: addressing the overuse and misuse of prior authorization in Medicare Advantage.
“Inexplicably,” Dr. Scott said, Congress “missed a golden opportunity to improve patient care by refusing to include prior authorization reform in the final package—a reform with vast bipartisan support in both chambers.
“Leaving it on the cutting room floor was an unnecessary gift to the insurance industry at the expense of our patients,” he added. “Physicians have unique training and expertise when prescribing appropriate care, and we don’t need insurance companies delaying and denying our patients vital treatments.”
Insurers once rarely used prior authorization, deferring to it when extremely pricier interventions were involved. Now, prior authorization is sometimes used for even the simplest generic medication.
These denials are causing real harm for patients in Medicare Advantage, along with those covered by other public and private insurers. The AMA and others are calling for reforms, including speeding up response times and maintaining continuity of care.
Nearly one-quarter of the 1,000 physicians the AMA surveyed (PDF) in late 2023 reported that prior authorization has led to a serious adverse event for a patient in their care, including 7% that said prior auth led to a patient’s disability or permanent bodily damage, congenital anomaly or birth defect or death.
Patients, doctors and employers can learn more about reform efforts and share their personal experiences with prior authorization at FixPriorAuth.org.
