Advocacy Update

March 22, 2024: Medicare Payment Reform Advocacy Update


For the second year in a row, in its March report (PDF) to Congress, the Medicare Payment Advisory Commission (MedPAC) found current physician payment rates inadequate and recommended that Congress update physician payments for 2025 at 50% of the Medicare Economic Index (MEI), citing expected cost increases in 2025, which could be difficult for physicians to absorb.

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Based on the Centers for Medicare & Medicaid Services’ MEI projections, the recommended update for 2025 would be 1.3%, or half of the projected 2.6% MEI growth rate. Unlike the temporary patches that Congress has adopted in recent years, MedPAC is recommending a permanent 2025 update that would be built into subsequent years’ payment rates.  

In response, a statement by AMA President Jesse M. Ehrenfeld, MD, MPH, appreciated this recommendation but also noted that an update tied to 50% of MEI will cause physician payment to fall even further behind increases in the cost of providing care. MedPAC’s recommendation came days after Congress allowed an approximate 2% cut in Medicare payments to become law. At the same time, physicians are dealing with the cyberattack at Change Healthcare, another financial blow to the survival to private practices. Therefore, the AMA is calling on Congress to pass the Strengthening Medicare for Patients and Providers Act (HR 2474) to provide payment updates that fully account for increases in the MEI.

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