The Medicare Payment Advisory Commission (MedPAC) voted today to address inadequate payment for Medicare physician services under current law, once again underscoring a longstanding policy failure that is widely recognized but remains unresolved.
The American Medical Association (AMA) welcomes MedPAC’s support for a 2027 payment update for physicians who care for Medicare patients. MedPAC voted to recommend an additional 0.5 percent update on top of the updates specified in current law—0.25 percent and 0.75 percent—and will forward that recommendation to Congress.
“The AMA appreciates that last year’s reconciliation bill provided a temporary 2.5 percent update for 2026; however, that increase expires in 2027. Absent meaningful reform, physicians again will face payment cuts, and Congress will once more be forced into last-minute efforts to avert further disruption,” said David H. Aizuss, M.D. chair of the AMA Board of Trustees.
In June, MedPAC said Medicare’s physician payments system needed to be overhauled. It called for a long-term, inflation-adjusted approach to better reflect the actual cost of providing care. MedPAC confirmed what physicians have experienced for years: Medicare payments have failed to keep pace with rising practice costs, endangering patient access to care.
When adjusted for inflation in practice expenses, Medicare physician payment has declined (PDF) 33% from 2001 to 2025. The AMA has long supported linking physician payment updates to the Medicare Economic Index – the established measure of practice cost inflation.
“While the AMA agrees with MedPAC’s diagnosis of the problem, it is disappointed that the commission has stepped back from the solution it endorsed just months ago, a point that two commissioners noted today," Dr. Aizuss said. “Linking Medicare physician payment updates to MEI as MedPAC itself suggested last June would provide stability for physician practices and certainty for patients, particularly those in rural and underserved communities, that access to their physician won’t be compromised.”
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About the American Medical Association
The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care. The AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.
