With more physician Medicare pay cuts proposed for 2027, a new comprehensive, bipartisan bill introduced in the U.S. House of Representatives would finally make structural changes that are needed to prevent those cuts and create a payment system that helps ensure that America’s seniors have access to quality, value-based healthcare.
The AMA-supported Patients First Act (H.R. 9693) addresses four core reforms that the AMA and organized medicine have long sought from Washington. If passed, the bill would:
- Establish automatic, annual inflation-based payment updates.
- Modernize budget-neutrality policies.
- Create simplified and clinically relevant quality measurement.
- Give doctors greater opportunities to participate in alternative payment models (APMs).
The legislation “aligns squarely with the ‘Characteristics of a Rational Medicare Physician Payment System’ [PDF], the framework endorsed by more than 120 state medical associations and national specialty societies and advances each of that framework’s three overarching goals—ensuring financial stability and predictability, promoting value-based care and safeguarding access to high-quality care for the patients who depend on small, rural and independent practices,” wrote AMA CEO John Whyte, MD, MPH, in a July letter of support for the bill.
The AMA letter (PDF) was sent to Reps. John Joyce, MD (R-Pa.), Kim Schrier, MD (D-Wash.), and Greg Murphy, MD (R-N.C.), chairs of the GOP Doctors Caucus and the Democratic Congressional Doctors Caucus. The three physician representatives introduced the bill, which amounts to a major reform of the Medicare Access and CHIP Reauthorization Act (MACRA). At the end of July, just two weeks after being introduced, the bill had 30 cosponsors at this article’s August deadline.
The legislation comes as physicians are staring down yet another payment cut on Jan. 1, 2027.
“The need for reform is clear and long overdue,” Dr. Whyte wrote in his letter. “When adjusted for inflation in practice costs, Medicare physician payment has fallen approximately 33% since 2001 [PDF], even as expenses for staffing, technology and regulatory compliance have climbed steadily. Physicians remain the only Medicare provider type that does not receive an annual payment update tied to inflation.”
The drop in payment has led many physician practices—including small, rural and independent practices—to consolidate or put a cap on how many Medicare patients they treat. Without change, it will continue to become more difficult for Medicare patients to find physicians who are able to accept new patients.
The AMA is leading the charge to reform the Medicare payment system and is asking physicians to write their representatives to urge them to cosponsor the Patients First Act.
Key points in the bill
One of the most important changes included in the Patients First Act is a permanent, annual payment update linked to the Medicare Economic Index (MEI), minus 1 percentage point. For qualifying APM participants, the update is MEI minus 0.5 percentage points.
The bill says that the update cannot be less than 25% or more than 75% of the MEI, something that provides stability and predictability.
“Under current law, the cumulative update for most physicians from 2026 to 2036 would be essentially flat— just 0.03%—while under this legislation it would grow by 7.7%, with a comparable improvement for physicians in alternative payment models,” Dr. Whyte noted in his letter.
“A statutory floor on the annual update provides added protection in low-inflation years. The legislation also extends and increases the work geographic practice cost index floor, benefiting physicians in many rural areas and 34 entire states, and establishes a five-year hybrid payment demonstration for independent primary care practices, fully funded and exempt from budget neutrality so as not to reduce payments for any other specialty,” he added.
Among other things, the Patients First Act also:
- Establishes geographic payment adjustments for high inflation to help offset cost pressures for physicians in affected areas.
- Replaces the Merit-based Incentive Payment System (MIPS) with the Patient Outcome Improvement National Tabulation System (POINTS) over a five-year transition period. “MIPS has imposed substantial reporting burdens and steep penalties—falling hardest on small, rural and independent practices— without demonstrable improvements in quality of care,” Dr. Whyte explained in his letter. “POINTS puts physicians and specialty societies, rather than the government at the center of quality measurement through a clinician-majority Quality Care Reform Task Force.”
- Provides new requirements for reporting and compliance with appropriate use criteria for imaging services, with exemptions for certain services and small/rural practices.
- Makes APM improvements, including freezing the qualifying participant threshold at 50% for three years, giving the Health and Human Services secretary authority to lower thresholds further if needed.
- Improves the physician payment system, including budget-neutrality reforms that raise the budget neutrality threshold to $57.64 million in 2028 with regular indexing thereafter. The current threshold is $20 million.
“These reforms will allow physicians to devote more time to patient care and less to arbitrary reporting requirements,” says the letter of support from Dr. Whyte.
Proposed 2027 pay cuts
Meanwhile, the Centers for Medicare & Medicaid Services (CMS) in July released its proposed 2027 revisions to payment policies under the Medicare Physician Fee Schedule.
Among other things, the proposed rule calls for a conversion factor cut of 1.19% for physicians participating in APMs and a cut of 1.68% for other physicians. Those figures reflect the expiration of a temporary 2.5% update for 2026, a 0.53% budget-neutrality adjustment to balance proposed coding and payment policy changes and the base 0.25% physician update and 0.75% alternative payment model participant updates under MACRA.
The AMA released an in-depth summary and analysis (PDF) of the 2027 Medicare physician payment schedule proposed rule and how it will affect physicians. The AMA will submit detailed comments about the proposed rule to CMS by the mid-September deadline.
Visit AMA Advocacy in Action to find out what’s at stake in reforming Medicare payment and other advocacy priorities the AMA is actively working on.
