Physicians are gaining ground in efforts to change federal policy that has contributed to Medicare rates falling about 33% since 2001 when adjusted for inflation.
A bipartisan bill—one of several the AMA has supported in its multipronged effort to improve the Medicare physician payment system—was recently introduced in the House of Representatives and it aims to overhaul the Medicare Incentive-based Payment System (MIPS) to make it more efficient, useful and fair for participating physicians.
Data shows that the majority of solo, small and rural practices are being cut at the highest levels to pay the 9% bonuses that MIPS offers. And studies have found that MIPS compliance costs physicians $12,800 per physician annually and requires more than 53 hours on quality assurance tasks each year.
The Medicare Physician Data-driven Performance Payment System Act of 2026, H.R. 8622, would provide relief to MIPS-participating physicians. The bill that Reps. Mariannette Miller-Meeks, MD (R-Iowa), and Herb Conaway, MD (D-N.J.), introduced would:
- Freeze the current MIPS performance threshold at 75 out of 100 for three years.
- Mandate a Government Accountability Office study in consultation with national medical specialty societies to recommend an alternative threshold methodology to Congress and the Department of Health and Human Services (HHS).
- Eliminate MIPS’ win-lose tournament style payment adjustments so that physicians won’t face steep penalties. Instead, the measure would link physicians’ MIPS performance to a portion of their annual payment update.
- Mandate that the Centers for Medicare & Medicaid Services (CMS) provide at least 75% worth of MIPS feedback reports and Medicare claims data to physicians during a given performance year.
“The combination of steep penalties and burdensome measures that don’t lead to improved quality or patient outcomes has overwhelmed physicians, especially those in private practice,” said AMA President Bobby Mukkamala, MD. “The reality of devoting significant time to tasks that do not improve patient health and yet still result in penalties in prompting private practices to close and exacerbating the trend of care shifting to higher cost settings.”
Dr. Mukkamala commended leadership that Reps. Miller-Meeks and Conway showed in introducing the legislation that seeks to improve the MIPS program.
House hearing on Medicare physician payment
On May 20, the House Energy and Commerce Subcommittee on Health held a general hearing to examine efforts under the Medicare Access and CHIP Reauthorization Act (MACRA) to reform Medicare physician payment and explore current challenges in the Medicare physician fee schedule.
In a statement submitted to the subcommittee (PDF), the AMA argued that the Medicare Physician Fee Schedule no longer reflects the cost of providing care and the dysfunction of that payment system was making it increasingly unaffordable for physicians to keep their practices open, which directly impacts patient access to affordable care.
The AMA urged lawmakers to pass legislation to stabilize physician payment and protect older-adult patients’ access to care, including:
- Legislation to permanently tie Medicare payments to the Medicare Economic Index (MEI) to reflect real practice costs.
- H.R. 8163, the Provider Reimbursement Stability Act of 2025, to fix the budget-neutrality process by raising the threshold for triggering a budget neutrality cut and requiring CMS to correct conversion factor cuts going forward if a budget neutrality estimate turns out to be incorrect.
- H.R. 8622, the Medicare Physician Data-driven Performance Payment System Act of 2026.
- Legislation to extend the current 3.1% MACRA Alternative Payment Model (APM) bonus payments and permanently maintain the qualifying threshold at 50% of payments.
The AMA also proposed that Congress require the Centers for Medicare and Medicaid Innovation to test proven physician-designed payment models that address the APM physician participation gap for specialty, rural and other types of practices that have had limited opportunities to participate in these models.
Budget-neutrality bill advances in House
On May 21, the House Ways and Means Committee voted 44–0 to advance H.R. 8163. The AMA, which strongly backed the bill, is leading the charge to reform the Medicare payment system, as described in detail in the June 2026 edition of the AMA Advocacy Impact Report.
The bill that was unanimously voted out of the Ways and Means Committee introduces long-overdue modernization and further tackles structural flaws that have led to the reductions and advances several reforms to improve the fee schedule’s stability and accuracy. Reforms include:
- A two-year look-back period for the CMS to prospectively correct utilization misestimates for newly unbundled codes. This would be done by requiring CMS to compare the claims data for a newly unbundled code in the first year of implementation with the original estimate. If the estimate were wrong, CMS would be required to readjust the conversion-factor dollar amount for the following year to ensure physician payment is correct moving forward and cuts resulting from misestimates are not permanent.
- A requirement that CMS update all categories of direct cost inputs simultaneously and at least once every five years. Today clinical staff wage rates, medical supply prices and equipment prices often reflect data that is years out of date. The bill also calls for mandating that CMS consult with physician specialty societies when updating the data.
- A 2.5% cap on year-to-year variance in the conversion factor that implements guardrails on dramatic swings in either direction. The limitation excludes statutory increases for MIPS or APMs and future MEI adjustments. This offers some predictability in physicians’ financial environment.
- Raising the budget-neutrality threshold from $20 million to $54.3 million starting in 2027, indexing it every five years to the MEI.
Dr. Mukkamala said the unanimous committee vote on the Provider Reimbursement Stability Act is “an encouraging sign that meaningful budget neutrality reform is possible.”
“Physicians are grateful that the House Ways and Means Committee took a major step in curing a flawed budget policy that results in physicians facing Medicare cuts every year,” he said. “Without reform, the Medicare Physician Fee Schedule produces a year-end budget mashup that injects uncertainty in physician practices due to the requirement that the fee schedule remain budget neutral. These cuts threaten the viability of practices, especially in rural and underserved communities.”
The AMA lauded Reps. Greg Murphy, MD (R-N.C.), and Tom Suozzi (D-N.Y.) for their leadership on the bipartisan effort, and Dr. Mukkamala said the AMA looks forward to working with Congress as the bill progresses.
In a letter (PDF) to Reps. Murphy and Suozzi, the AMA, nearly 50 national medical specialty societies and all 50 state medical associations and the Medical Society of the District of Columbia said that the Provider Reimbursement Stability Act “represents a necessary step toward building a more rational, predictable Medicare physician payment system” and “reflects the true cost of delivering high-quality medical services.”
The letter said that physicians strongly support targeted, complementary reforms that the bill offers to improve the Medicare Physician Fee Schedule’s stability and accuracy.
Huge electronic attachments rule win
In a victory for removing obstacles to care, the CMS final rule on claims attachments that took effect May 26 reflects AMA advocacy to standardize electronic attachments for claims. The rule moves practices away from inefficient manual processes—faxes, mail and payer portals—for claim-documentation submission. Instead, it embraces a consistent electronic approach that reduces administrative burden and workflow disruption.
In comments to CMS (PDF) as it was finalizing the rule, the AMA advocated that CMS focus attachment standards narrowly on claims and to reject adding new prior authorization or documentation requirements so that the rule delivers relief for physicians instead of more complexity that contributes to physician burnout.
The AMA also advocated for, and the final rule, includes:
- Sufficient time for practices and electronic health record developers to implement changes.
- A single and predictable electronic signature standard.
- Flexibility that allows electronic health record innovation to improve communication with payers.
“We appreciate CMS’ prioritization of reducing administrative burdens for clinicians and the Administration’s focus on addressing burnout in the medical profession,” the comments letter said.
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.
