AMA praises MedPAC recommendation for more Medicare physician reimbursement

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The American Medical Association (AMA) praised the Medicare Payment Advisory Commission (MedPAC) for supporting an increase for physician reimbursement.

AMA President Jesse Ehrenfeld issued a statement shortly after the advisory panel’s morning session on Jan. 11, the opening discussion of this month’s two-day meeting.

The nonpartisan advisory board offers its counsel to Congress on issues affecting Medicare. Last year, MedPAC floated an increase for physician payment rates based on inflation rates, and in December used that formula to recommend raises for physician reimbursement.

But overall, Medicare payment has decreased while physicians’ practice expenses soared, Ehrenfeld said.

AMA “has long championed this reform and commends MedPAC for voting this year to again call for lawmakers to adopt an inflation-based update for 2025 as a critical first step toward the necessary work of reforming the broken Medicare payment system,” Ehrenfeld said.

“Long-term reforms from Congress are overdue to close the unsustainable gap between what Medicare pays physicians and the actual costs of delivering high-quality care,” Ehrenfeld said. “When adjusted for inflation in practice costs, Medicare physician pay declined 26% from 2001 to 2023. It is urgent that Congress act now to reverse the 3.37% Medicare cut that took effect on January 1, 2024, and tie future updates to inflation to prevent the problem from getting worse.”

AMA is supporting legislation known as House Resolution 2474, the “Strengthening Medicare for Patients and Providers Act.” It would change the physician payment rate by updating Medicare payments based on inflation as measured by the Medicare Economic Index (MEI).

The lawmakers noted the cuts make it especially difficult for small, rural, and low-income serving practices to keep their doors open.

“My physician’s heart always puts patients first. It is important to me that they get timely care and see the doctor they need when they need to, especially in medically underserved communities,” Rep. Raul Ruiz, MD (D-California), said in his introductory announcement last year. “I am deeply concerned about the impact the outdated Medicare physician payment rate is having on health care access for my constituents.”

Ruiz is cosponsor with Rep. Larry Bucshon, MD (R-Indiana), Rep. Ami Bera, MD (D-California), and Rep. Marianette Miller-Meeks, MD (R-Iowa). Their legislation introduced in April 2023 followed MedPAC’s first time voting in March 2023 for physician payments be updated by tying them to 50% of the MEI.