AMA to MedPAC: Physician pay should be linked to inflation
In a letter (PDF) to the Medicare Payment Advisory Commission (MedPAC), the AMA thanked the Commission for its ongoing commitment to improving Medicare physician payments and urged MedPAC to recommend that Congress adopt an update in 2027 fully indexed to practice cost inflation via the Medicare Economic Index.
During the Dec. 2025 meeting, MedPAC discussed a recommendation for increasing 2027 Medicare physician payment rates by current law plus 0.5%, which would result in a 1.25% increase for qualifying participants in advanced alternative payment models and a 0.75% increase for all other physicians and qualified health care professionals. At the same time, the growth in the cost of providing care is expected to be 2.1%.
This recommendation would allow the gap between what Medicare pays physicians and what it costs to provide care to grow. In its June 2025 Report to Congress, MedPAC expressed concern that “[t]his larger gap between input-cost and payment-rate growth could create incentives for clinicians to reduce the number of Medicare beneficiaries they treat, stop participating in Medicare entirely, or vertically consolidate with hospitals, which could increase spending for beneficiaries and the Medicare program.” Medicare physician payment should keep pace with the increases of physicians’ input costs to ensure predictability and stability for physician payment, to preserve private practice as a viable business model, and to maintain or improve access to care.
