It is not just physicians and medical societies saying that Medicare physician payment is unsustainable and could hinder older adults’ access to health care.
Medicare trustees have now issued the same warning.
“Absent a change in the delivery system or level of update by subsequent legislation, the trustees expect access to Medicare-participating physicians to become a significant issue in the long term,” the trustees said in their most recent report.
The report notes that the Medicare program faces “challenges” as physician payments—which are not based on underlying economic conditions—don’t keep up with inflation or the cost of practicing medicine.
The trustees predicted that, because of the gap between rising costs and falling payments, the “quality of health care received by Medicare beneficiaries would, under current law, fall over time compared to that received by those with private health insurance.”
“This report continues the drumbeat of recommendations that all point out that the payment system is failing patients and physicians,” said AMA Immediate Past President Jesse M. Ehrenfeld, MD, MPH. “When physicians face a set of facts, we respond to improve the situation. It would be political malpractice for Congress to sit on its hands and not respond to this report.”
The AMA is leading the charge to reform the Medicare payment system.
MedPAC also calls for change
The report follows a recommendation from the Medicare Payment Advisory Commission (MedPAC) to link physician payment to the Medicare Economic Index (MEI), a critical move that the AMA has long supported.
Many members of Congress from both parties agree with this approach, and they introduced the bipartisan Strengthening Medicare for Patients and Providers Act, H.R. 2474, legislation that would provide physicians with an annual, permanent inflationary payment update in Medicare tied to the MEI.
Dr. Ehrenfeld said it is time for the other legislators to step up.
“Medicare trustees and MedPAC have teed up the issue for members of Congress who, no doubt, have heard from constituents about problems accessing health care under Medicare,” said Dr. Ehrenfeld. “The AMA has plenty of reform ideas to permanently solve the problem and end this annual cycle of payment cuts and patches.”
Unlike hospitals and other Medicare providers, physicians have not received an inflationary payment update and have watched their payments—when adjusted for inflation in practice costs—fall (PDF) 29% since 2001. These increasingly thin operating margins disproportionately affect small, independent and rural physician practices, as well as those treating socially, economically or historically marginalized communities.
“The momentum for change is evident,” Dr. Ehrenfeld said. “Yet physicians—battered by the Change cyberattack, COVID, and climbing costs of operating a practice—have yet to see a response equal to the moment. Instead, physicians saw a 2% cut in Medicare payments in 2023 and nearly 2% in 2024.”
Learn more with the AMA Medicare Basics series, which gives an in-depth look at important aspects of the issue, including the inadequacy of Medicare physician payments a how the MEI is calculated.
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