Medicare physician pay is unsustainable and getting worse

Marc Zarefsky , Contributing News Writer

AMA News Wire

Medicare physician pay is unsustainable and getting worse

Oct 30, 2023

The first pillar of the AMA Recovery Plan for America's Physicians is reforming Medicare physician payment, and that push is more important than ever with impending Medicare pay cuts coming in 2024.

Speak up for Medicare reform

The need for Medicare physician payment reform has never been greater. The AMA shows how the current system is unsustainable—and how you can urge Congress to support solutions.

The Centers for Medicare & Medicaid Services (CMS) is proposing a 3.36% cut to Medicare physician payment in 2024. That change follows a 2% cut in 2023.

"Physician payment before this proposed cut was already unsustainable, and it continues to get worse," said Jennifer Hananoki, assistant director on the AMA’s federal affairs team. "This latest proposed cut further threatens access to high quality physician care for the more than 50 million older adults and people with disabilities who are enrolled in Medicare."

Meanwhile, physicians face up to 9% in Medicare payment penalties under the Merit-based Incentive Payment System (MIPS). In response to advocacy from the AMA and organized medicine, physicians may now apply for an “Extreme and Uncontrollable Circumstances” hardship exception to avoid such penalties, which would apply in 2025 based on the 2023 performance period.

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The exception will not be automatic, and interested physicians and groups must actively request reweighting of one or more MIPS performance categories due to the COVID-19 public health emergency. Requesting reweighting of all four MIPS performance categories will avoid a MIPS penalty in 2025. Applications are due Jan. 2, 2024.

Hananoki discussed the potential cuts and what the AMA is doing to fight them in a recent episode of “AMA Update.”

Watch the Nov. 3 episode of the "AMA Advocacy Insights Webinar Series" to get more details on where Medicare payment reform stands now, how the AMA and others are pushing for permanent payment reform, and what physicians can do to get involved. Register now

Learn how you can take part in the fight to reform Medicare on behalf of your patients and practices at the AMA's Fix Medicare Now website.

The AMA has challenged Congress to work on systemic reforms and make Medicare work better for you and your patients. Our work will continue, fighting tirelessly against future cuts—and against all barriers to patient care.

Pushing back against proposed pay cuts

While CMS proposed the significant cuts, it also projected the cost of inflation will increase by 4.5% in 2024, as measured by the Medicare Economic Index. That contrast could have dire impacts on physicians and their patients.

"Another Medicare payment cut and high inflation could be the final blow to some practices, particularly small, independent and rural practices," Hananoki said.

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In response, the AMA delivered a 120-page document to the CMS that outlined the potential damage this decision would have on physicians and their patients.

"At the same time, the AMA and our partners in organized medicine are advocating on the Hill for Congress to pass H.R. 2474, which would provide a permanent annual update equal to the increase in Medicare Economic Index," Hananoki said.

There is momentum building for Medicare reform, according to Hananoki, and not just among physicians.

"In July, a bipartisan group of 101 House members signed a letter (PDF) calling for urgent actions on problems in health care, which included Medicare physician payment," she said, noting that the letter came three months after the introduction of H.R. 2474.

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"The AMA and physicians across the country have sent 150 letters to Congress and generated 150,000 contacts to policymakers,” making use of the AMA's Fix Medicare Now website and others.

"To be successful, we know that it's vital to keep this issue front and center," she said.

AMA Update” is your source for physician-focused news. Hear from physicians and other experts on trending public health concerns, practice issues and more—because who’s doing the talking matters. Catch every episode by subscribing to the AMA’s YouTube channel or listen to all AMA podcasts at

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