In 2021 amidst the COVID-19 pandemic, physicians faced a perfect storm of Medicare payment cuts by the Centers for Medicare and Medicaid Services. All told, it would have amounted to a 9.75% cut to some physicians, which would have severely impeded patient access to care due to the forced closure of physician practices. With the help of physician advocates across the country, the AMA was able to successfully work with Congress on legislation that delayed the payment cuts scheduled to take effect on January 1, 2022.

Unfortunately, history repeated itself in 2022 as physicians faced another round of cuts scheduled to take effect on January 1, 2023. Organized medicine fought to avert a combined 8.5% in Medicare payment cuts in the 2023 omnibus spending bill, but couldn’t stave off these cuts completely this time around, so physicians will see a 2% cut in Medicare payments this year, with at least a 1.25% cut in store for 2024. Once again, these cuts threaten the viability of physician practices and patients’ access to care.

Our stance

Medicare physician pay has eroded by 22% over the last two decades relative to inflation and temporary patches to the Medicare physician payment system are not sustainable year after year. Congress must work with the medical community on long-term, substantive payment reforms and we urge Congressional hearings as soon as possible to ensure America’s Medicare patients continue to receive access to the care they need. Congress needs to establish a permanent, annual inflationary Medicare physician payment update that keeps up with the cost of practicing medicine and encourages practice innovation.

A rational Medicare payment system would ensure financial stability and predictability (including an annual inflationary update), promote value-based care, and safeguard access to high-quality care.

Act now to protect Medicare patients

Congress recently introduced H.R. 2474, legislation that would reform the flawed Medicare physician payment system and provide annual inflationary updates, based on the Medicare Economic Index (MEI), for Medicare physician services, similar to updates received by other health care providers. While there are many other concerns with the Medicare physician payment system that still need to be addressed, H.R. 2474 is a great first step toward fixing payment inequities and injecting more financial stability into physician practices, allowing them to invest in new ways of providing care and ultimately assuring Medicare beneficiaries have access to high-quality care. Contact your lawmakers and urge them to support H.R. 2474.