END MEDICARE'S UNDERPAYMENTS

TO PHYSICIANS

On December 21, 2024, Congress did not stop the 2.8% Medicare physician pay cut that will take effect on January 1, 2025, instead removing the previous solutions presented before passing the American Relief Act, 2025 (H.R.10545). Since the legislation to extend funding for the federal government lasts until March 14, 2025, this underpayment issue will likely not be presented or addressed again before that date. We demand immediate action by Congress to fix this financial crisis, which is underpaying physician practices and creating atrocious conditions for Medicare patients seeking medical attention. To provide quality healthcare, these physicians must receive wage increases. Cutting wages establishes a system where providers and patients suffer unfair consequences through no fault of their own. We need permanent solutions, not temporary measures, from the government that initially created these situations.

From 2001 to 2023, Medicare physician payments declined 26%. Physicians also saw a 2% pay cut in 2023, being one of the only providers without automatic pay increases to counter inflation. In March 2024, the Senate halved the originally intended 3.4% pay cut to 1.68%. This pay reduction, while less, still jeopardizes the chance of high-quality medical care for anyone enrolled in the program as physicians start turning away patients, leaving millions without proper medical care.

The Medicare Economic Index (MEI), which was 3.8% in 2023, is 4.6% this year, meaning it is at its highest level in a century. Two main factors creating this issue are a negative budget-neutrality adjustment linked to introducing a CMS-developed office visit add-on code and a 1.25% reduction from a temporary legislative update. These cuts coincide with the ongoing growth in the cost to practice medicine. Decreases also create a system where physicians struggle to keep their doors open to Medicare patients as operating costs grow exponentially.

CY 2024 Medicare Physician Payment Schedule and Quality Payment Program (QPP) Proposed Rule Summary (American Medical Association PDF)

Congress Fails Patients and Physicians (AMA, 12-23-24)

Congress fails to stop 2.83% Medicare payment cut for 2025 (AMA, 12-21-24)

Final Medicare 2024 rule would cut physician payments by 3.4% (CMA, 11-07-23)

Inside the proposed 2024 Medicare physician pay schedule (AMA, 11-07-23)

Calendar Year (CY) 2024 Medicare Physician Fee Schedule Final Rule (CMS, 11-02-23)

Another year of Medicare physician pay cuts is unconscionable (AMA, 09-14-23)

THE LOOMING IMPACT ON HEALTHCARE PROVIDERS AND PATIENTS IN 2025

The American healthcare system faces a new financial challenge as Congress has failed to avert a 2.83% Medicare payment cut scheduled for January 1, 2025, by removing solutions entirely from the American Relief Act, 2025 (H.R.10545) before passing it on December 21, 2024. This decision, from budgetary constraints and legislative gridlock, threatens to exacerbate existing pressures on physicians, healthcare facilities, and patients.

Understanding the Payment Cut
The 2.83% reduction in Medicare payments arises from the statutory requirements under the Medicare Access and CHIP Reauthorization Act (MACRA). Designed to promote value-based care, MACRA instituted a system of automatic payment adjustments to control costs and incentivize efficiency. However, many argue that these cuts fail to account for inflation, rising operational costs, and the economic realities of healthcare delivery in the post-pandemic era.

Impact on Physicians
The reduction poses significant challenges for physicians, particularly those operating in small or independent practices. Medicare reimbursement rates already lag behind the actual costs of providing care, and this cut deepens the financial strain. Affected physicians may face difficult choices, including limiting the number of Medicare patients they serve, reducing services, or consolidating with larger healthcare systems.

For patients, particularly seniors and individuals with disabilities who depend on Medicare, reduced physician availability could mean longer wait times, fewer care options, and potential disruptions in continuity of care. Vulnerable populations in underserved areas will likely bear the brunt of these consequences, further widening health disparities.

The Broader Economic Context
The decision to proceed with the cuts reflects broader fiscal pressures facing the federal government. With Medicare accounting for a significant portion of federal spending, policymakers are grappling with balancing sustainability with access. However, healthcare advocates warn that short-term savings could lead to long-term costs, including increased hospitalizations and reliance on emergency services.

Calls for Reform
Healthcare organizations, including the American Medical Association (AMA), have urged Congress to prioritize Medicare payment reform. The AMA highlights that these cuts are part of a broader trend of declining physician compensation relative to inflation, which risks destabilizing the healthcare system.

The 2.83% cut, unless reversed, creates an urgent need for systemic improvements in 2025 for Medicare reimbursement.

H.R.10545 - American Relief Act, 2025 (Congress.Gov)

Congress fails to stop 2.83% Medicare payment cut for 2025 (AMA, 12-21-24)

Biden signs bill to avoid a government shutdown, but Congress fails to stop devastating Medicare payment cut (CMA, 12-21-24)

Congress Fails Patients and Physicians (AMA, 12-23-24)

GERIATRICIANS ARE DECLINING

Due to low Medicare reimbursement for services, Geriatricians are now declining. Despite a surging older population, there are far fewer geriatricians, with just over 7,400 compared to over 10,270 in 2000. The number of people over 65 has increased by more than 60% in the United States since 2000, meaning the ratio of providers to older adults is 1 to 10,000. According to the American Geriatrics Society (AGS), 30,000 geriatricians will be needed by 2030 to care for seniors.

Geriatrics Workforce By the Numbers (AGS Official Site)

As America ages, there are few doctors who specialize in seniors’ care (The Washington Post, 2-17-24)

Report discusses how geriatric care providers declining as number of older adults rises (McKnights Long-Term Care News, 11-13-23)

ACTIONS OF 2024

October 29, 2024, The Medicare Patient Access and Practice Stabilization Act of 2024 (H.R.10073), a bipartisan bill, was introduced in the U.S. House of Representatives by Rep. Greg Murphy, M.D. (R-NC), along with co-sponsors including Rep. Jimmy Panetta (D-CA), Rep. Mariannette Miller-Meeks (R-IA), Rep. Ami Bera (D-CA), Rep. Larry Bucshon (R-IN), Rep. Raul Ruiz (D-CA), Rep. John Joyce (R-PA), and Rep. Kim Schrier (D-WA).

The primary objective of this legislation is to address the impending 2.8% reduction in Medicare physician reimbursement scheduled for January 1, 2025, as proposed by the Centers for Medicare & Medicaid Services (CMS). In addition to preventing this cut, the bill proposes a 1.8% payment increase for 2025, corresponding to half of the Medicare Economic Index (MEI). This adjustment aims to provide financial relief to physicians facing rising operational costs and to ensure sustained access to care for Medicare beneficiaries.

As of now, H.R.10073 has been referred to the Subcommittee on Health for further consideration. The bill's proponents are advocating for its passage during the current congressional session to avert the scheduled payment cuts and to implement the proposed payment increase for the upcoming year.

H.R.10073 - The Medicare Patient Access and Practice Stabilization Act of 2024 (Congress.Gov)

Urgent: Tell your Representative to cosponsor H.R. 10073! (American Medical Association)

March 8, 2024: the Senate Passed H.R.4366: Fiscal Year 2024 Appropriations Act. This bill provides a 1.68% boost in Medicare payments for physicians, partially addressing the 3.4% cut that went into effect in January. Physicians will be reimbursed by 2.93% effective March 9 until the end of the year.

H.R.4366 - Consolidated Appropriations Act, 2024 (Congress.Gov)

Latest Medicare physician pay cut shows desperate need for overhaul (AMA, 3-6-24)

February 9, 2024: a bipartisan group of senators announced the formation of the "Medicare Payment Reform Working Group." The group's purpose is for the lawmakers to "make necessary updates" to 2015's Medicare Access and CHIP Reauthorization Act (MACRA). The group is also planning to seek feedback from stakeholders.

U.S. Sens. Catherine Cortez Masto, D-Nevada; Marsha Blackburn, R-Tennessee; John Barrasso, R-Wyoming; Debbie Stabenow, D-Michigan; Mark Warner, D-Virginia; and Minority Whip John Thune, R-South Dakota stated in a joint release that the group formed to begin working on new legislation for “long-term reforms” to physician payments under Medicare and other program changes.

Cortez Masto, Blackburn, Thune, Barrasso, Stabenow, Warner Announce Formation Of Medicare Payment Reform Working Group (Cortez Masto Official Site, 2-9-24)

ACTIONS OF 2023:

December 13, 2023: Bipartisan lawmakers supporting ending the 3.37% cut posted a "Dear Colleague" letter that nearly 200 members of Congress co-signed. The letter states, "We as policymakers must ensure that physicians and other providers who treat Medicare patients continue to have the necessary financial support to care for our nation's seniors."

"Dear Colleague" PDF (AMA, 12-13-23)

New year, new hope: Momentum builds in Congress to cancel the cut (AMA, 1-4-24)

Congress faces pressure to reverse doctors' payment cuts — again (Axios, 1-10-24)

December 7, 2023: Rep. Greg Murphy, MD (R-N.C.) introduced the "Preserving Seniors' Access to Physicians Act" (H.R. 6683). The bipartisan legislation aims to eliminate the January 1, 2024, 3.37% Medicare physician payment cut. On December 8, 2023, the legislation was referred to the Subcommittee on Health by the Committee on Energy and Commerce.

H.R.6683 - Preserving Seniors’ Access to Physicians Act of 2023 (Congress.Gov)

Bipartisan reps introduce bill canceling 2024's 3.4% Medicare pay cut to physicians (Fierce Healthcare, 12-8-23)

April 3, 2023: The Strengthening Medicare for Patients and Providers Act (HR 2474) was introduced to the House of Representatives. This legislation will provide an annual physician payment update tied to the Medicare Economic Index (MEI). The index measures inflation, employee wages, the cost of running a practice, increases in office rent, and professional liability insurance premiums. Payments will be adjusted as needed based on current expenses. On April 14, 2023, the legislation was referred to the Subcommittee on Health.

H.R.2474 - Strengthening Medicare for Patients and Providers Act (Congress.Gov)

Health care groups rally behind bill to reform Medicare payment (AMA, 4-20-23)

ADVOCATE & REFORM GROUPS:

The Coalition to Strengthen America's Healthcare

The Coalition to Strengthen America's Healthcare is a community of over 2 million grassroots advocates dedicated to ensuring continuous access to high-quality, life-saving healthcare for all Americans. Representing a diverse range of hospitals and health systems—including community, children's, teaching, public, religious, behavioral health, and long-term care facilities—the Coalition focuses on defending Medicare, funding rural health, protecting access to care, and supporting the healthcare workforce.

The Coalition to Strengthen America's Healthcare Official Site

Facebook

The Medicare Payment Reform Working Group

The Medicare Payment Reform Working Group, a small group of Republican and Democrat senators, wishes to "make necessary updates" to 2015's Medicare Access and CHIP Reauthorization Act (MACRA). Medicare physicians and their patients are counting on these lawmakers to create positive changes for a future where everyone is supplied with the necessary resources.

Cortez Masto, Blackburn, Thune, Barrasso, Stabenow, Warner Announce Formation Of Medicare Payment Reform Working Group (Cortez Masto Official Site, 2-9-24)

The Physician's Grassroots Network

The Physician's Grassroots Network (PGN), a project of The American Medical Association (AMA), is an advocacy initiative that unites physicians to influence public policy and legislative decisions affecting the medical field. It is open to all physicians interested in advocacy and willing to engage in grassroots activities. The network supports reforms and policies that improve healthcare delivery, access, and affordability, reduce administrative burdens, enhance practice sustainability, and address physician burnout. It Promotes public health initiatives, disease prevention programs, and responses to public health crises.

The Physician's Grassroots Network (Official Site)

The Physician's Grassroots Network (Facebook)

The Physician's Grassroots Network (X)

The Physician's Grassroots Network (Instagram)