It’s time for lawmakers to recognize the threats to independent medical practices and time to take “immediate and decisive actions” to stop driving physicians away from private practice, the AMA told Congress.
“The fabric of our health care system, woven with the dedication and expertise of these practices, is unraveling under the compounding pressures of unsustainable financial models, burdensome regulations and systemic inequities,” the AMA said in a statement submitted to the House Ways and Means Committee (PDF) for its hearing entitled, “The Collapse of Private Practice: Examining the Challenges Facing Independent Medicine.”
The AMA urged Congress to pass comprehensive legislative reforms that create:
- Equitable payment models.
- Reduced administrative burdens.
- Expanded support for rural and underserved areas.
- A health care infrastructure secured from emerging threats.
“The AMA and physician community stand ready to work with Congress to preserve the legacy and future of independent physician practices, ensuring that they continue to provide high-quality, personalized care to all communities across the nation,” the AMA’s statement says. “This is not just a call for action; it is a plea to safeguard the heart of American health care before it is too late.”
Private practices—the foundation of how health care was delivered for much of the 20th century—have been on the decline for years.
In 2022, 46.7% of physicians worked in private practices. That’s down 13 percentage points from a decade earlier when 60.1% of physicians worked in private practices, according to the AMA Physician Practice Benchmark Survey. Physicians were increasingly working in hospitals as direct employees or contractors or working in practices that a hospital or health system at least partially owned, the AMA research found.
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“The challenges my fellow physicians in independent practice and I face today—from increasing economic pressures to ever-growing administrative hassles—are significant,” AMA President Bruce A. Scott, MD, wrote in a recent leadership column. “But so too is the resolve of the AMA to create a more sustainable health care model that fosters thriving private practices and enables the close relationship between patients and their physicians.”
It takes astute clinical judgment as well as a commitment to collaboration and solving challenging problems to succeed in independent settings that are often fluid, and the AMA offers the resources and support physicians need to both start and sustain success in private practice.
What needs to change
The AMA’s statement to the House Ways and Means Committee outlines half a dozen broad areas of pressure that are making it difficult for physicians to make a private practice viable. The statement offers suggestions on numerous ways lawmakers improve the independent practice environment. In addition to needing to pass laws to help reduce physician burnout and cut electronic fund transfer fees and administrative burdens in health care, read on to learn about some of the areas where Congress can help by passing new laws.
Payment challenges
Adjusted for inflation, Medicare physician payment rates have plunged 29% between 2001 and 2024. Physicians, unlike other Medicare providers, do not receive an automatic annual inflation-based payment update. The AMA’s benchmark survey showed that the most cited reason for independent physicians selling their practices to hospitals or health systems had to do with inadequate payment.
Congress should pass the bipartisan Strengthening Medicare for Patients and Providers Act (H.R. 2474), which provides a permanent annual update equal to the increase in the Medicare Economic index. The AMA is also urging Congress to pass, among other things:
- The bipartisan Provider Reimbursement Stability Act (H.R. 6371), which would address statutory budget neutrality requirements in the Medicare Physician Fee Schedule that undermines financial stability.
- Legislation that eliminates the flawed underlying penalty structure in the Merit-based Incentive Payment System (MIPS), which is more likely to penalize small, rural and independent practices and practices that care for historically minoritized and marginalized patients.
Innovation models and technology
When telehealth restrictions were temporarily lifted during the pandemic, patients and physicians came to appreciate the convenience that telehealth offers as a way to deliver and receive care. But the changes aren’t permanent yet. That needs to change.
The bipartisan Creating Opportunities Now for Necessary and Effective Care Technologies for Health Act” (S. 2016; H.R. 4189) and the Telehealth Modernization Act (S. 2967; H.R. 7623) are among the proposed legislation that would extend the COVID-19 telehealth flexibilities that have improved access to care during a national physician workforce crisis.
Prior authorization
This insurer cost-cutting practice puts significant administrative and time burdens on health care staff and physicians and profoundly impacts private practices’ sustainability, not to mention the health consequences for patients.
Despite prior regulatory action, more needs to be done to fix prior authorization, the AMA told Congress, including bills to streamline and more efficiently apply prior authorization. The AMA supports, among other things, eliminating prior authorization requirements for regularly approved care, prohibition of retroactive denials if care is preauthorized and quick response times—24 hours for urgent care, 48 hours for nonurgent care.
Find out more about the AMA Private Practice Physicians Section, which seeks to preserve the freedom, independence and integrity of private practice.
