CHICAGO — Endorsing a stabilizing approach to Medicare reform, the Medicare Payment Advisory Commission (MedPAC) recommended today that Congress link next year’s physician payment update to the growth in the cost of providing care.

The recommendation comes just as Congress failed this week to prevent this year’s 2.8 percent cut, marking the fifth consecutive year of cuts. 

“With exquisite timing, MedPAC has highlighted how Congress can strengthen Medicare policy. With uncertainty surrounding the continuing resolution, the report offers a roadmap to Congress on how to address the cuts,” said American Medical Association President Bruce A. Scott, M.D. “The AMA appreciates commissioners and staff for listening to physicians around the country.”

The AMA has long supported tying Medicare updates to the full Medicare Economic Index (MEI), or practice cost inflation. MedPAC voted today to recommend to Congress a 2026 payment update to physician practices of MEI minus 1 percentage point. 

“MedPAC was created to advise Congress. Now, will lawmakers listen?” Dr. Scott said. “We welcome MedPAC’s help in highlighting the danger of doing nothing. The status quo is not an option.”

MedPAC has expressed concern that the Medicare updates are insufficient in the face of high inflation for practices, which is estimated at 3.5 percent this year. The AMA has warned lawmakers that the unsustainable economics of running a practice threaten access to care, especially in rural and underserved communities. 

“This recommended policy change is needed to ensure patients will have continued access to quality care. Medicare is broken. Under the financial stress, burnout has become an occupational hazard for physicians. As these cuts pile up year after year, more and more physicians are closing their practices, leaving patients without access. It just makes sense that payment must keep pace with increasing costs. Other providers already have automatic, yearly updates, and physicians are the foundation of health care,” Scott said.  

Physicians are reeling in the face of Congress abandoning patients and physicians in the continuing resolution this week. Organized medicine wrote lawmakers (PDF) this week to decry that decision  to lock in the Medicare cuts. A bill that would have addressed those cuts was near passage in December, but it fell victim to internal congressional politics at the last minute. 

If Congress goes back to the drawing board, the AMA and its allies will push to include reform in the next package. 

“Physicians have learned that we must keep educating lawmakers about the need to secure access to care for our seniors. Let’s not waste another opportunity,” Dr. Scott said.