Inflation adjustments for Medicare payments? Yes, please

A bipartisan House bill has been introduced that would tie the Medicare fee schedule to the Medicare Economic Index, creating an annual inflation-based update.

The bill was introduced by 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).

According to the American Medical Association, 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 in 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% 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., in a statement. “It’s no coincidence that the bill sponsors are physicians. They know the challenges physicians face.”

The bill received praise from physician groups.

"Medicare’s current physician payment system is undermining physicians’ ability to provide high quality, comprehensive care – particularly in primary care,” said Tochi Iroku-Malize, M.D., MPH, FAAFP, president, American Academy of Family Physicians, in a statement. “The AAFP is proud to endorse the Strengthening Medicare for Patients and Providers Act, which will help modernize Medicare physician payment, protect beneficiaries’ access to care, and provide oversight of health care consolidation. The AAFP urges the House and Senate to swiftly pass this critical legislation.”

The Medical Group Management Association also voiced its support.

“MGMA strongly supports the Strengthening Medicare for Patients and Providers Act — legislation which would provide a positive payment update for physicians based on the full Medicare Economic Index on an annual basis,” said Senior Vice President of Government Affairs Anders Gilberg, in a statement. “Medical practices are in no way immune to record inflation, staffing shortages, and across-the-board cost increases. This legislation would allow Medicare to more accurately reflect the impact of the broader economy on practices’ financial stability.”

The American College of Physicians supports the bill, but says more needs to be done.

“This legislation is a start in correcting the issues with Medicare physician payments, but this alone will not be sufficient to solve the problem,” said Ryan D. Mire, M.D., MACP,president, ACP, in a statement. “We need Medicare payments to physicians that will ensure access to high-quality care for our nation’s seniors and provide financial stability to physicians.”

If the bill doesn’t pass, many physicians may be forced to make a difficult decision.

“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,” the AMA’s 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.”