What’s the news: Following AMA advocacy in leading the charge to reform the Medicare payment system, a bipartisan group in the U.S. Senate has joined to ask the chamber’s Democratic and Republican leaders to address the 2.8% cuts to Medicare payment that are scheduled to take effect Jan. 1.
“Failure to address these cuts will threaten the continued ability of physicians and other health care providers to care for their patients,” says the letter (PDF), sent late last month to Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) and signed by a bipartisan group of 41 senators. The letter was circulated by Sens. John Boozman (R-Ark.) and Peter Welch (D-Vt.).
“In addition to addressing the looming 2.8% payment cut, Congress must develop long-term legislative solutions to reform the Medicare Access and CHIP Reauthorization Act (MACRA), such as enacting targeted reforms to statutory budget-neutrality requirements and payment updates reflective of inflationary pressures,” says the letter. “These efforts are critical to supporting patient access to high-quality Medicare-covered services and bolstering our health care workforce.”
The Senate letter follows one from the AMA and 127 other state medical associations and national medical societies asking (PDF) Congress to use these last few congressional days to prevent the scheduled cuts.
The letter to congressional leaders also urges Congress to provide a positive payment update for 2025. All 50 state medical societies—and D.C.—as well as 77 national medical societies signed.
October, meanwhile, saw the introduction of a bill in the House of Representatives that would provide a 4.7% payment update in 2025. That measure would eliminate the 2.8% Medicare physician payment cut slated for Jan. 1 and provide a positive payment update that is equal to one-half of the Medicare Economic Index.
The physician payment increase contained in the measure—H.R. 10073, the Medicare Patient Access and Practice Stabilization Act of 2024—is similar to the recommendation made by the Medicare Payment Advisory Commission. The bill was introduced by Reps. Greg Murphy (R-N.C.), and Jimmy Panetta (D-Calif.), along with several cosponsors. Visit the AMA’s Fix Medicare Now website to tell your representative to cosponsor the bill.
Earlier, a bipartisan majority of the House of Representatives signed onto a letter urging House leadership (PDF) 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.”
Why it’s important: As the letter to Senate leadership notes, “the scheduled cut represents the fifth consecutive year that CMS [Centers for Medicare & Medicaid Services] has issued a fee schedule lowering payments to physicians and other clinicians."
Combined with CMS’ estimate that practice-cost expenses will rise by 3.5% in 2025, doctors would see a 6.3% effective cut in Medicare physician payment absent congressional action.
“Persistent instability in the health care sector—due, in part, to consistent payment cuts—impacts the ability of physicians and clinicians to provide the highest quality of care,” says the bipartisan Senate letter. “These continued payment cuts undermine the ability of independent clinical practices—especially in rural and underserved areas—to care for their communities. Some practices have limited the number of Medicare patients they see, or the types of services offered.”
The lower payments to physicians have resulted in practice hiring freezes, delayed system improvements and care model changes—including transitioning to value-based care systems—and cutting services offered to patients.
The AMA’s research shows that physician Medicare pay, when adjusted for inflation, has dropped by 29% since 2001 (PDF). Meanwhile, the Medicare physician payment schedule itself highlights the fact that rent, paying staff and buying supplies are all expected to increase even more in 2025.
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.
Without changes to the system, the Medicare program is on an unsustainable path where access to care is threatened, the AMA has told Congress for a number of years. Temporary, partial patches aren’t sustainable and a rational payment system would better meet Americans’ needs.
To fix the system over the longer term, the AMA supports the bipartisan Strengthening Medicare for Patients Providers Act, that would provide physicians with an annual Medicare payment update tied to the Medicare Economic Index.
The AMA also supports the bipartisan Provider Reimbursement Stability Act, which would reform the Medicare payment schedule budget-neutrality policies by, among other things, requiring CMS to reconcile inaccurate utilization projections based on actual claims and prospectively revise the conversion factor accordingly.
Learn more: To explore further, read this Leadership Viewpoints column by AMA President Bruce Scott, MD on why congressional action on Medicare payments must occur this year.
You can take action in your practice to raise awareness of this critical issue. The AMA offers printable Fix Medicare Now flyer (PDF) that can be hung in waiting areas to let patients know that the Medicare payment system is on an unsustainable path that threatens their access to physician. It includes a large QR code for patients to access FixMedicareNow.org where they can learn more about the physician Medicare payment issue, share their personal stories and contact their members of Congress to help ensure their continued access to high-quality care.
