The following statement is attributable to:
Jesse M. Ehrenfeld, M.D., M.P.H.
President, American Medical Association

“The proposed Medicare physician payment schedule released today is a critical reminder that patients and physicians desperately need Congress to develop a permanent solution that addresses the financial instability and threatens access to care.

“The payment schedule estimates the Medicare Economic Index (MEI) increase at 4.5 percent, the highest this century and on top of last year’s 3.8 percent. MEI is the government measure of inflation in medical practice costs.

“In the face of these growing costs of running a medical practice, physicians have faced the COVID pandemic and increased inflation. Not only have Medicare payments failed to respond, but physicians saw a 2% payment reduction for 2023, creating an additional challenge at a perilous moment. For 2024, the new rule indicates there will be another downward adjustment of 3.36 percent.

“When adjusted for inflation, Medicare physician payment already has effectively declined (PDF) 26% from 2001 to 2023 before additional inflation and these cuts are factored in. Physicians are one of the only providers without an automatic inflationary increase.

“This is almost biblical in its impact. Seven lean years that include a pandemic and rampaging inflation. Physicians need relief from this unsustainable journey.

"Momentum is building for reform. In January, the Medicare Payment Advisory Commission recommended a physician payment update tied to the MEI for the first time. And in April, a bipartisan group of House members introduced a bill that would provide annual inflation updates to the Medicare fee schedule based on the MEI. At the AMA’s recent Annual Meeting, physicians from across the country called for a campaign to address this situation.

“These increasingly thin or negative operating margins disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or other historically minoritized or marginalized patient communities. Piling on more cuts is an unsustainable approach. Congress needs to turn its attention to fixing Medicare so we can preserve access for patients.

“The AMA and our partners in organized medicine have developed a set of principles (PDF) to guide efforts on Medicare physician payment reform. This is part of the AMA’s Recovery Plan for America’s Physicians and represents our ongoing work to establish a rational Medicare physician payment system that provides financial stability through positive annual payment updates, improves the financial viability of physician practices, and eases administrative burdens.”