CHICAGO — Another government report today echoed what the American Medical Association (AMA) and others have been saying: The Medicare payment system has not kept up with the cost of practicing medicine, threatening access for some of the 65 million Medicare patients.
“We have clearly diagnosed the problem,” said AMA President Jack Resneck Jr., M.D. “Now, like doctors do every day, let’s prescribe the remedy.”
In the Medicare Trustees Report released today, the trustees “expect access to Medicare-participating physicians to become a significant issue in the long term” unless Congress takes steps to bolster the payment system.
“In addition, the law specifies the physician payment updates for all years in the future, and these updates do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases,” the report said.
The Medicare Trustees report 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, something the AMA has long supported.
"The trustees, MedPAC and some members of Congress see the long-term threats to Medicare access. For those who have not joined this effort, they should talk to patients and physicians across the country. Physicians have struggled to keep their practices open in the face of rampant inflation, COVID and growing costs of running a medical practice. Medicare payments have not responded adequately, capped off most recently by a 2% payment reduction in 2023,” Resneck said.
As one of the few Medicare providers without an inflationary payment update, physicians have watched their payments (when adjusted for inflation) decline (PDF) 26% from 2001 to 2023. These 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.
“MedPAC and the Trustees have provided lawmakers with a legislative agenda for this year. Congress should adopt a 2024 Medicare payment update that recognizes the full inflationary growth in health care costs,” Resneck said. “To ignore this would be malpractice.”
Medicare reform is a central plank in the AMA Recovery Plan for America’s Physicians.
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