CHICAGO —The American Medical Association (AMA) today welcomed a legislative effort that could put Congress on the path to finally reforming the outdated Medicare payment system.
The succinct bill HR 2474 would tie the Medicare fee schedule to the Medicare Economic Index, something the AMA has long supported. Doing so would put physicians on equal footing with almost all other health care providers by instituting an annual inflation-based update. Physician payment rates have been subject to a six-year payment freeze that will last until 2026, and even experienced 2% across-the-board cuts this January. In that time, physicians had to deal with inflation, COVID-19, burnout and the rising cost of running a practice. When the freeze ends, the statutory update for most physicians will be limited to 0.25 percent indefinitely, far below even normal rates of inflation.
“This toxic brew threatens health care access for Medicare patients,” said AMA President Jack Resneck Jr., M.D. “It’s no coincidence that the bill sponsors are physicians. They know the challenges physicians face. The AMA will work with them so the rest of Congress understand that the status quo threatens access to care in communities across our country.”
Reps. Raul Ruiz, M.D. (D-CA), Larry Bucshon, M.D. (R-IN), Ami Bera, M.D. (D-CA) and Mariannette Miller-Meeks, M.D. (R-IA) introduced the bill.
The bill introduction comes on the heels of the Medicare Payment Advisory Commission (MedPAC) recommendation that Congress increase 2024 Medicare physician payments above current law by linking the payment update to the Medicare Economic Index. Also, the Medicare Trustees Report recently said lawmakers should “expect access to Medicare-participating physicians to become a significant issue in the long term” unless Congress takes steps to bolster the payment system.
Physician payments (when adjusted for inflation) have declined (PDF) 26% from 2001 to 2023, capped off most recently by a 2% payment reduction in 2023. Increasingly thin operating margins disproportionately affect small, independent, and rural physician practices, as well as those treating low-income or other historically minoritized or marginalized patient communities.
“We are deeply worried that many practices will be forced to stop taking new Medicare patients–at a time when access to care is already inadequate,” Resneck said. “Congress often waits until problematic situations become full-fledged crises. Members need to hear from their hometown physicians that we are nearing a crisis. Congress needs to pass this bill stat.”
Medicare reform is a central plank in the AMA Recovery Plan for America’s Physicians.
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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.