Medicare & Medicaid

Inflation-based update for Medicare physician payments with Todd Askew


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In today’s AMA Update, AMA Senior Vice President of Advocacy, Todd Askew, shares details on legislative progress for Medicare payment reform and what it could mean for physicians and patient access to care. Get the latest updates on legislation recently introduced in Congress that would apply an automatic inflation update to Medicare physician payments and tie the Medicare physician fee schedule to the Medicare Economic Index (MEI), something the AMA has long supported. Doing so would put physicians on equal footing with almost all other health care providers that receive annual inflation-based updates. AMA Chief Experience Officer Todd Unger hosts.

Learn how the AMA is #FightingForDocs and access resources from the AMA Recovery Plan for America’s Physicians.

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  • Todd Askew, senior vice president of advocacy, AMA

AMA Recovery Plan for America’s Physicians

After fighting for physicians during the pandemic, the AMA is taking on the next extraordinary challenge: Renewing the nation’s commitment to physicians.

Unger: Hello and welcome to the AMA Update video and podcast series. There's a big development on the Medicare payment front. We're here to talk with Todd Askew, AMA's senior vice president of advocacy in Washington, DC, about how it's going to impact physicians and patients. I'm Todd Unger, AMA's chief experience officer in Chicago. Todd, welcome back.

Askew: Thanks, Todd.

Unger: So there was a pretty important development this week in the effort to establish a more sustainable Medicare physician payment system. Let's get right into it and tell folks out there what it means.

Askew: Sure. So you're right, earlier this week, a bipartisan group of members of Congress—all four of them physicians, by the way—introduced legislation to provide an inflation-based update for Medicare physician payments, just like pretty much every other category of Medicare provider has. So this was Dr. Ruiz, Dr. Bucshon, Dr. Bera and Dr. Miller-Meeks introducing this legislation, which would build in automatic updates annually into the payment system, which is really the cornerstone of building a sustainable payment system that could continue to guarantee access to quality care for beneficiaries.

Unger: Well, that is a huge development. Todd, I know this is something that the advocacy team has been working on for some time. Do you want to take us a little bit through how that bill came about?

Askew: Sure. We have been talking for—well, really, almost a year with a lot of members of Congress, in partnership with the states and specialties in the Federation of Medicine, about developing a comprehensive Medicare reform proposal. It's clear in these annual battles that we fight year after year, fighting off cut after cut, that something needs to change. And the cornerstone, as I mentioned, to that is automatic payment updates.

And so after lots of conversation, lots of time and lots of real commitment by these members of Congress and many others to finding a solution, they made the decision this week to go ahead and introduce it so we can start down what will be a long road, but we've got to start somewhere. And this is kind of the beginning phase of that.

Unger: Now, for those of you who are familiar with the AMA's Recovery Plan for America's Physicians, you will, of course, note that Medicare payment reform is one of those key pillars. Todd, are you hoping that—you talked about the long road. Are you hoping that this is going to kick off discussions longer-term about reforming the payment system that's clearly been broken?

Askew: Right, sure. Right, it's not going to happen overnight, but like I said, it is that first step. It is one piece. We are working on multiple pieces of reform. But this bill—and I should mention the number, if people are interested in reaching out to the lawmakers to talk about it is H.R. 2474. H.R. 2474.

This is that piece that we begin our work, begin the process of educating members of Congress and their staffs about the need to include inflationary updates as part of the Medicare physician payment system. And this finally gives us something concrete that we can point to, to talk about, and then action we can ask people to take in stepping forward and supporting the bill.

Unger: Now, I know that this is part of an overall comprehensive look that the advocacy team has been doing about a Medicare approach that makes sense long-term. How does this particular one fit into that overall plan?

Askew: So this is the one piece. There are other pieces that are out there that need to be developed and introduced and move forward to have more of a comprehensive reform of the system. Another key piece will be dealing with the way that Medicare applies budget neutrality to the Medicare physician payments.

Essentially, payments go up for one set of services or new things come into the program, all the other services get cut in order to pay for that. So there's just this static pool of resources and we're just moving the dollars around. And without the MEI update, without the inflationary update, that pool never grows. So we both have to grow that pool on an annual basis and then we also have to make sure we do a better job at reallocating through this budget neutrality process.

Frequently, a misestimation will occur. They will assume that a new code or an increase to a code will generate a lot more spending than it actually does. Those cuts get made to every other code. And then that increase never materializes.

And so those dollars that they cut from everybody else never get put back in the system. And so we need to change some things about that to make sure that we can go backwards and say, "Hey, you missed that estimate. You overestimated the amount of dollars that needed to be pulled out of the system to pay for it, so let's put those dollars back in."

And also, a relatively low number estimate, a $20 million change in spending, triggers these budget neutrality cuts. And that was set in statute in the '80s, I believe. So it's time to update that number. We think $100 million is a reasonable number before Medicare needs to trigger those cuts. So that's another key element of reforming part of that Medicare budget neutrality requirement, to make sure it doesn't unnecessarily reduce resources in the physician pool.

The other key element is fixing what we have now, the MIPS program and the APM program. Clearly, they are very confusing. They're not well-aligned with each other. A lot of their measures are not really clinically relevant. So what we want to do is have a more precise, relevant system that is not so burdensome for physicians to participate in. So that's kind of the third leg of the stool that is the overall reform package that we hope will come together for Medicare payments.

Unger: So clearly a lot of work underway. Todd, does this give you any hope that we can avert the kind of cliffhanger—I know that I've been on these calls with you at the end of the year that you and the team go through this, as we kind of wait to see if there's going to be some huge payment cut and we're out there trying to avert that?

Askew: Well, we hope so. I mean, it's not just us, obviously, it's physicians, who don't know what the update is going to be next year and literally are left waiting until the very end of the calendar year to know what the payment system is going to look like the next year. It reduces confidence. It makes people hesitate about making investments in their practice or changing the way that they provide care to the beneficiaries because they don't know what the payment system is going to look like in the coming year.

And so stability is really key to moving the Medicare physician payment system reform forward. This would do that. Now, doesn't mean that, just because we have a bill introduced, we're done with these annual exercises. We will see a Medicare physician payment will come out this summer—it usually comes out in July—to propose updates for 2024. And there are a number of elements in there that could cause us to have another cut that we have to fight off at the end of the year.

But this is an important reminder. Here's the tool. We've now put forward this one critical element to reforming the Medicare physician payment system that we can point to and say, we don't have to do these annual fights every year. We can build stability into the system. We can build predictability to give physicians confidence and to give patients confidence that they'll have access to their physicians in the future.

Unger: Todd, as we continue to move forward with advocacy efforts on Medicare payment reform, why is it so important for physicians to get involved? And what is the best way for them to do that?

Askew: Well, in pretty much any issue you work on in Washington, we can provide the technical details and talking points, but the folks in Congress, they want to hear from their constituents. They want to know how this impacts the voters, their folks back home, your patients back in the community where they come from that they go back to most weekends, that they spend congressional recess and work periods back in the district talking to voters.

And so they need to hear from the voters. They need to hear from physicians in their community about how important it is that we build some stability into the Medicare physician payment system. They need to understand what type of decisions, practices have had to make because of the instability, because of this stagnant pool of resources that really hasn't grown very much, in terms of annual updates, over the last 20 plus years.

And that's what's going to motivate folks to vote, to take a tough vote. This is not going to be an inexpensive problem to fix. And so it is going to take some real commitment from all of us to demonstrate and to talk to members of Congress about why this is so important, and for members of Congress to take that necessary step. And so the way you get that is knowing how it's going to impact people at home.

And so using resources like the AMA's grassroots network at Also keeping up-to-date with the developments through updates like this, but also the AMA's biweekly electronic Advocacy Update, which informs subscribers. It's a free email you can sign up for on the AMA website.

Keeping abreast of those developments and constantly touching base with the member of Congress to make sure that they understand now is the time. Here's the bill, and here's our opportunity to kind of put these annual fights behind us and look forward into how we can make the necessary improvements in Medicare to continue to serve beneficiaries in the best possible way.

Unger: Todd, thanks so much for updating us on this development. We'll keep tabs on that and have you back when there's more information. In the meantime, folks, you heard it from Todd, your stories really matter. So check out those resources on the AMA website and make sure to tell your legislators how this impacts your practice.

That wraps up today's episode. We'll be back soon. In the meantime, we encourage you to learn more about the AMA's Recovery Plan for America's Physicians and our ongoing efforts to reform Medicare payment. You can find more information about that at We'll be back soon with another update. In the meantime, take care.

Disclaimer: The viewpoints expressed in this video are those of the participants and/or do not necessarily reflect the views and policies of the AMA.