CHICAGO — The Medicare Payment Advisory Commission (MedPAC) voted today to urge Congress to link Medicare payment updates for physician practices to the growth in the cost of providing care—a timely recommendation as lawmakers wrestle with how to handle yet another cut in physician pay.
MedPAC joined the American Medical Association (AMA) in supporting this Medicare reform, which would ensure patients maintain access to care.
“In studying options, MedPAC saw the overwhelming evidence that a new approach was needed. We appreciate that the commission recommended an automatic, yearly update to reflect the increasing costs of running a practice. This is the approach Medicare has long used for other health care providers, and it has a record of ensuring stability,” said AMA President Bruce A. Scott, M.D.
Among the evidence MedPAC weighed was that physicians are experiencing a fifth consecutive year of payment cuts while medical inflation remains high. Physicians are abandoning private practice, and patients—especially in rural and underserved areas—face obstacles to accessing care. The recommendation comes as Congress failed to stop or reverse the 2.8 percent cut in Medicare payments for this year despite several proposals to do so.
“It’s been said that a crisis is a terrible thing to waste. Sadly, we are in a crisis. We hope lawmakers listen to MedPAC about the need to stop doing the same thing while expecting different results. Let MedPAC be a catalyst for change,” Dr. Scott said. “Congressional leaders have indicated that they intend to address physician payment updates this year. While previous commitments have not panned out, doctors across the country remain closely engaged on this issue.”
The MedPAC vote follows the decision this week to increase by 5 percent the payment rates for Medicare insurers. This move will generate more than $25 billion in additional revenue for the industry.
“Increasing pay to insurance companies—which are enjoying record profits—while cutting pay for physicians who are struggling to keep our practices afloat suggests a case of misaligned priorities. Physicians are the very foundation of health care. Regardless how flush insurers are, patient access will suffer if physicians close their practices,” Dr. Scott said.
For three consecutive years, MedPAC has consistently urged Congress to increase Medicare physician payment. In its March 2025 Report to Congress, the commission recommended tying Medicare updates to the Medicare Economic Index (MEI), or practice cost inflation for 2026. The recommended update to physician practices was for MEI minus 1 percentage point. At the meeting today, MedPAC voted to recommend that Congress change the baseline increase to physician payment from 0.25% (or 0.75% if participating in an alternative payment model) under current law to a portion of MEI, such as MEI minus 1 percentage point, every year for the foreseeable future.
The AMA and all of organized medicine continue to urge Congress to pass legislation instituting an annual update that fully reflects the MEI.
“We appreciate that MedPAC experts recognized the status quo is bad medicine for our patients,” Dr. Scott said. “We suggest Congress listen to the experts.”
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The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care. The AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.
