Medicare & Medicaid

The real cost of the 2024 Medicare physician fee schedule with Jason Marino


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Physician Medicare payment is down 26% since 2001, when adjusted for inflation. When you look at the numbers, it’s clear that the government needs to fix Medicare now for physicians. Jason Marino, director of Congressional affairs for the AMA, joins to break down the facts and figures and explain why reforming Medicare physician payment just makes sense. AMA Chief Experience Officer Todd Unger hosts.


  • Jason Marino, director of Congressional affairs, AMA

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Unger: Hello and welcome to the AMA Update video and podcast. It's Fix Medicare Now week on the AMA Update, and that means most of our episodes this week are focused on the urgent need for Medicare payment reform. Today I'm joined by Jason Marino, the director of congressional affairs for the AMA in Washington, D.C. He's going to break down the facts and figures that help explain why payment reform just makes sense. I'm Todd Unger, AMA's chief experience officer in Chicago. Jason, we're glad to have you back.

Marino: Glad to be here, Todd.

Unger: Jason, when you look at the numbers, they clearly show that reform is long overdue. Medicare physician payment has been on the decline for decades. Why don't we just start by having you walk us through some of the key stats in this case that every lawmaker needs to hear.

Marino: Sure thing, Todd. There's a few key numbers here. But the one that everyone needs to know is 26%. That's the amount that the Medicare physician payment has declined from 2001 to 2023 when you adjust for inflation. So the last 22 years, when adjusted for inflation, physicians have seen a decline in their Medicare payments by 26%.

During that time, the cost to run a practice has gone up about 47%. And that's according to what's called the Medicare Economic Index. That's the federal government CMS's estimate of what practice costs should be to, their estimate. Meanwhile, the physician payments in Medicare over this 22-year period gone up about 9%. That's a big hit and we've all been living through inflation. We know that—people know what that means.

Unger: That's an incredible gap between that reduction, -26, and did you say 47% increase?

Marino: 47% increase in practice costs.

Unger: That's astronomical, that gap. And those figures don't even factor in the latest cut that's proposed by the Centers for Medicaid ... Medicare and Medicaid Services. We've talked before about the important takeaways in the proposed 2024 Medicare physician pay schedule, but Jason, can you give us a recap on those numbers?

Marino: Sure, there's some important numbers you should know. One is 3.36%, the other is 4.5. So you mentioned there's a Medicare proposed rule. Every year Medicare does a proposed rule and they make some estimates on payments, and the most recent one, which has been proposed and which is going to be finalized potentially this week, this week, says that for next year, 2024, despite that terrible statistics I just showed you at 26%, losing to inflation, the CMS is proposing and going to make final, so it's going to be law once it's finalized, a cut of 3.36% cut, 2024, a cut.

In that same rule that's about to be finalized they also say, well for 2024 practice costs according to our estimates should be 4.5% MEI. Medicare Economic Index should be 4.5%. That's the biggest increase that they've proposed in since 2000. So that's a big number, but sorry. Don't pay too much attention to that 4.5, because we're actually going to ignore that and we're going to cut you 3.36%. That's a lot that's a lot to absorb if you're a physician that's been experienced in the last 22 years. That's—we've been living through inflation. Your supply cost, your cost for your staff, to your rent for your building, that's going up. Probably going up some cases more than 4.5 and you're going to be cut.

So once again, there's a clear gap between what physicians practice costs are and what the federal government is paying. And I hate to say this, but it's not heading in the right direction. It's getting worse.

Unger: So we have a gap. Its gap is increasing. The problem is urgent and thankfully the AMA has been working nonstop on Medicare payment reform this year,. Which I know that you and your team certainly can attest to. Jason, what is exactly does an advocacy campaign of this size and this urgency entail?

Marino: Sure, so we've been campaigning on Medicare payment reform on all fronts. That means we're engaging directly with members of Congress, House members, senators, their staff. We're participating in media interviews. We're amplifying physician voices. To date just this year, we sent out over 150 letters to Congress. We made over 178,000 contacts to Congress. Those contacts, they come from the AMA's Physician Grassroots Network. They come from the Patients Action Network and they come from our website, which is

And we're seeing some incredible responses, I can tell you from physicians and their engagement. And it's helpful. It's needed and it's helpful. And if you look at all the media articles in the last year, this current year, there's been about 15 million impressions. And that's not even counting our paid advertising that we're doing. So we're making sure that every member of Congress is hearing our need, is hearing the need and the call to reform this broken Medicare physician payment system they're hearing from us.

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Unger: Jason, when they do hear from you, and they see the numbers, which paint an incredibly clear picture of what the problem is, what do you hear from them? What kind of feedback do you get back about Medicare payment reform and the proposed pay schedule?

Marino: Let me just tell you a quick story about something. I was in a recent meeting. I find myself in the room, I'm looking across from a U.S. Senator, a few members of Congress, their spouses, and when I have a chance to speak, and usually when someone speaks from the AMA they know what I mean. Once I mentioned Medicare they know, this is—they know what we're talking about.

And in that meeting one ... a spouse of one of the members was there, and she said, let me tell you about—let me write something for you, because I hear you. I hear this—I'm hearing and I'm living this through this Medicare payment. And she said, I'm going to draw this. I don't have a pencil, so we gave her a pencil and she drew this chart.

And I'm thinking that's the AMA gap chart. That's the chart about the 26%. And before I could say anything, one of the Congressional staff said, that's the AMA's gap chart, sir. That's the AMA gap chart. And then everyone recognized it. And that's just one example of the saturation when you have a member of Congress's spouse talking about the gap chart. That's a good sign that we're getting some awareness.

I had another prominent Senator staff talking about in their nightmare, the gap chart appeared in the staffers nightmare. That's we're getting in there. We're getting there. I get advice from one Senator saying, you really need to get that gap chart out. There's a chart out there, really, you should really get that chart and show it to people. But that's our chart. That's good to hear that. That's good feedback.

So yes, there is some great awareness of the problem. And there's a lot more of, wow, it's not good that they're proposing a cut of 3.36%, and we know we haven't taken care of physicians the last 22 years. That's probably not a good idea to cut them 3.36%. So we are being heard or there's awareness out there.

Unger: I think there was a movie about this, Jason. But we won't go in there, but you seem to be doing a good job in terms of raising awareness of that. And I think there's also been a noteworthy development on the Hill recently, and I'm referring to the discussion draft legislation to reform what really is a central part of the problem here. Budget neutrality. And how that affects Medicare physician pay. What do physicians need to know about that situation with budget neutrality?

Marino: Well, I often hear from members of Congress, their staff and from physicians. Why is it every year it just seems like there's a new cut? Where are these cuts coming from? We know we're not getting updates for physicians for inflation, but where are these new cuts coming from? It stems from every year, as you mentioned earlier, CMS, Center for Medicare and Medicaid Services, does a proposed rule, and they shift codes around. They shift services around and whenever they do these shifts it has to be done in a budget neutral way.

So they may increase something here, and then they cut everyone across the board to pay for that. And there's been some wild swings where a few years ago middle of COVID, there it was going to be a 10% cut from all these swings. And the Congress had to step in and push that out and delay that. And so how stop these wild swings and have more stability in the payment system? And the AMA convened a working group with some of the physician groups from primary care to surgeons to specialties, and we developed a plan to stabilize payments, and we took it to Congress and we got the GOP doc caucus to take it up and to propose it.

And it's things like there shouldn't be massive swings from year to year. What triggers these cuts in the first place should be based on reality, not some assumptions. CMS, they make these assumptions. And if they overestimate, these cuts are based on estimates that are turned out to be wrong sometimes five times magnitude wrong way. And the cut happens, and no one ever goes back to fix the cut. Well, maybe we should go back and see. Make sure that what actually happened, was projected, actually occurred or didn't and fix it down the road. And we can do that.

And then what triggers these cuts, there's a threshold that was set in 1989. Well, it's 2023. Maybe that should be increased. It's never been increased dollar amount. Which triggers that? Let's increase that. And then have a way to keep it increased so it keeps up with inflation.

And that would not solve the whole problem, but at least create some more stability in the Medicare payment system. And this discussion draft essentially is a proposal, we hope, to get legislation introduced bipartisan, and get all the key committees in the Senate and the House to work together to pass it, and in a bipartisan way, as soon as we can. And it's one clear step towards permanent Medicare physician payment reform.

Unger: OK, so we've talked a lot about the numbers, and the ability to get that graph embedded in folks' minds and subconscious. But numbers, of course, are just one part of convincing somebody about which way to go. Talk to us a little bit about the equally important role that physicians personal stories play, and the work that we're doing here, and where physicians should share their stories to get them in front of policymakers.

Marino: That's a good question, and you might be wondering out there if senators and staff and the spouses are talking about this chart and showing—recognizing there's these cuts for physicians, why aren't—why is the Senate floor right now on C-SPAN taking up the bill and giving us our update and fixing our problems? Why is it not happening despite everyone knowing it?

And I think the key point here is to remember that in Congress, in congressional affairs and governing with legislators, it's all about people. It's personal relationships. So you can have great stats, which we do. You can have great arguments, which we do in graphs and statistics. But it's personal stories that actually move the members, to get them to actually move and do something different.

You have to break through. These members are—all the issues and problems of the world are put on their lap every day. And so it's easy for even though this issue is big to us for physicians, they've got 100 issues are facing. You've got to break through, and sometimes the key is to take these stats I'm giving you, and you've been living it, to tell it in your own words, what it means to be your practice. Or if you work for a hospital setting, what it means for you and that setting, and how it impacts patients.

How does this impact patients? There's 65 million Medicare patients out there, and they paid all their lives into Medicare, and then when they get on Medicare, they want to be able to see a physician. And this is going to prevent that. This is a big threat to access. And you have to put it in your own words, and I'll give you an example.

We had a hearing last week on Energy and Commerce Committee, a key committee. And we had a think tank person who was not a physician, say, well, four out of five people have no problem—reporting no problem seeing their physician, despite these things you're talking about they're not getting updated. And the member of Congress said, "Well, that doesn't speak to my district. I just had some doctors in here saying that in my whole three counties near where I am, not a single primary care doctor is there. So I don't know what your statistics are, but that's not my reality."

And you know, and you say four out of five, well, what about the one out of five that are not having—reporting problems, when they're 65 million people, that's about 13 million people that are having a problem. So all due respect. And that only that moment happened because a physician was talking to that member of Congress or their staff and told them a story about their county, and there wasn't a doctor and someone was going to retire. Those are golden and that moves people.

And then it makes the stats, and the charts make more sense. And I think we need more of that, where you can see them back in their state. You come to Capitol Hill, you do an online virtual. Anyway you can see your member to have some connection and tell a story in your own words. There's 100 ways to do it right. So there's no perfect way.

Unger: And if they do have a story, is there a place to share that?

Marino: We are trying to—I think through our, and also in our upcoming AMA Interim Meeting, we're going to try and get away where we can actually record people sharing their story and put it out there. And we did this very successfully in the context of prior authorization reform. Where we had physicians talk about some of the horror stories that they dealt with their patients with prior authorization and put it out there, and it tells a story, and it got a lot of attention. And we're hoping to replicate that in this space, in this area.

Unger: We're going to be talking a lot about Medicare payment reform at the upcoming Interim Meeting, and we'll get back to you with more information on how you can share those stories. Of course, Medicare payment reform is a top priority in the AMA's Recovery Plan for America's Physicians. For the latest updates on our efforts visit Jason, thanks so much for joining us today. That wraps up today's episode. We'll be back soon with another AMA Update and in the meantime, you can find all our videos and podcasts at Thanks for joining us today. Please 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.