“This is the strongest policy we have created addressing the existential threat of inadequate Medicare reimbursement. This is our AMA working for our practicing physician colleagues and is a value add of their KMA membership that sends me and the rest of our Delegation to the AMA and value add of membership in the AMA.”
David Bensema, MD
Delegate to the AMA for the KMA
Nation’s physicians to develop action plan to reform Medicare
AMA Press Release, June 12, 2023
CHICAGO — At the Annual Meeting of the American Medical Association (AMA), the nation’s physicians called for a multipronged campaign to overhaul the outdated Medicare payment system, saying that patient access and survival of practices are at risk. Physicians from across the country spoke of their intense frustration with the flawed payment formula and the need for Congress to fix it.
“This cannot wait; we are past the breaking point. Congress must urgently address physician concerns about Medicare to account for inflation and the post-pandemic economic reality facing practices nationwide. Our patients are counting on us to deliver the message that access to health care is jeopardized by Medicare’s payment system. Being mad isn’t enough. We will develop a campaign – targeted and grass roots – that will drive home our message,” said AMA President Jack Resneck Jr., M.D.
In the face of inflation, the COVID pandemic, and growing costs of running a medical practice, physicians have struggled to keep open their doors, jeopardizing access to care. Not only have Medicare payments failed to respond, but physicians saw a 2% payment reduction for 2023, creating an additional challenge at a perilous moment. Physicians are one of the only Medicare providers without an inflationary payment update.
When adjusted for inflation, Medicare physician payment has effectively declined 26% from 2001 to 2023. These increasingly thin or negative 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.
Medicare reform is a central plank in the AMA Recovery Plan for America’s Physicians.
“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,” Dr. Resneck said. “Physicians have diagnosed the problem and are offering solutions, but obviously the body politic must respond.”
In January, the Medicare Payment Advisory Commission called for a physician payment update tied to the Medicare Economic Index (MEI) for the first time. And in April, a bipartisan group of House members introduced a bill that would provide annual inflation updates to the Medicare fee schedule based on the MEI.
“Duct-taping the widening cracks of a dilapidated payment system has put us in this precarious situation. Physicians are united in our determination to build a solid foundation rather than further jury-rigging the system,” Resneck said.
Editor’s note: An AMA Viewpoint highlights what is at stake to patients and physicians in Medicare physician payment reform.
Tell Congress to provide Annual MEI updates:
Physicians are the only providers whose Medicare payments do not automatically receive an annual inflationary update. As a result, Medicare physician payments have lagged 26% behind the rate of inflation growth since 2001. During this current period of record inflation and coming on the heels of a highly disruptive pandemic, this statutory flaw often amplifies the impact of other payment policy changes like “budget neutrality” adjustments, performance incentives, and so forth.
Thankfully, a bi-partisan group of physician members of Congress – Representatives Larry Bucshon, MD (IN), Raul Ruiz, MD (CA), Mariannette Miller-Meeks, MD (IA) and Ami Bera, MD (CA) recently introduced H.R. 2474, legislation that would reform this flawed system and provide annual inflationary updates, based on the Medicare Economic Index (MEI), for Medicare physician services, similar to updates received by other health care providers.
While there are many other concerns with the Medicare physician payment system that still need to be addressed, this legislation is a great first step toward fixing payment inequities and injecting more financial stability into physician practices, allowing them to invest in new ways of providing care and ultimately assuring Medicare beneficiaries have access to high-quality care.
Please take a moment and contact your legislators and urge them to help fix the flawed Medicare physician payment system by supporting H.R. 2474 today!