Pressure on Congress to Reform Medicare Physician Fee Schedule, Prevent Reimbursement Cuts

The combination of physician reimbursement cuts with medical practice cost inflation have led to a 29% reduction in Medicare physician payments from 2001 to 2024.

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The proposed 2025 Medicare Physician Fee Schedule (MPFS) would cut physician reimbursement by 2.8%, and now a bipartisan group of lawmakers is urging Congress to pass legislation to block the cut.

The letter was signed by 223 members of the House and spearheaded by Reps Mariannette Miller-Meeks, MD (R, Iowa), and Jimmy Panetta (D, California).¹

“As a Physician, I am thrilled to lead more than 200 bipartisan House members in urging leadership on both sides to address the proposed doc reimbursement cuts,” Miller-Meeks said in a statement.¹ “The overwhelming, bipartisan support is a testament to the importance of fixing this issue to preserve patient access to quality care. Long-term payment reform is still desperately needed, but a temporary fix is also critical. In Congress, I will continue to lead the charge for better health access and outcomes for Americans.”

The American Medical Association (AMA) and the American College of Rheumatology (ACR) applauded the letter and the number of members of the House who signed on to the letter, which is addressed to House Speaker Mike Johnson (R, Louisiana) and Minority Leader Hakeem Jeffries (D, New York).^2,3

The letter urges Johnson and Jeffries to “expeditiously pass legislative fixes that not only stop another damaging round of cuts to Medicare payments, but also provide greater certainty and stability for clinicians serving Medicare beneficiaries.”¹

For the past 4 years, Congress has intervened to mitigate portions of the cuts, and the representatives claim that the MPFS is “inherently broken.”

“Increased instability in the healthcare sector due to looming cost hikes impacts the ability of physicians and clinicians to provide the highest quality of care and threatens patient access to affordable healthcare,” the letter states. “Rural physicians and other clinicians, along with those treating underserved populations, are facing the most daunting challenge of trying to provide care in the wake of devastating reimbursement cuts.”

More than a month earlier, more than 120 health organizations wrote to Congress urging for a fix to physician payment.⁴ Stakeholders have noted that the 2.8% cut coincides with a 3.6% increase in medical practice cost inflation. After adjusting for inflation, Medicare physician payments have declined by 29% from 2001 to 2024.

“Congress must ensure a stable Medicare program that does not continue to cut payments to providers every year,” American Medical Group Association President and CEO Jerry Penso, MD, MBA, said in a statement at the end of September.⁵ “Congress can act to reverse the cut in the proposed physician fee schedule, ensuring patient access to the quality care our members provide.”

The letter to Johnson and Jeffries calls for a legislative fix that would update payment to reflect inflationary pressures on physician practices.¹ The fix would tie the update to the Medicare Economic Index.

“The Medicare payment system is fundamentally flawed, and repeated annual cuts are taking a significant toll on rheumatologists, rheumatology care teams and the U.S. healthcare system as a whole,” Deborah Dyett Desir, MD, ACR president, said in a statement.³ “We urge congressional leadership to heed the concerns of their colleagues and take action to implement meaningful legislative solutions that address payment cuts, reduce administrative burdens, and account for the impact of inflation on physicians. The time for change is now—enough is enough.”

The letter also proposes reforming the MPFS budget neutrality requirement and increasing the budget neutrality threshold. Another request is to limit changes to the MPFS conversion to be no more than 2.5% in a given year.

“We have an upcoming election and only a short time to act. But the good news is that instead of gridlock, we have agreement,” Bruce A. Scott, MD, president of the AMA, said in a statement.² “Instead of conflict, we have compromise. Let’s get to work and pass these crucial policy changes before the end of the year.”

References

1. Miller-Meeks leads 232 House members to address doc cuts before 2025. Press release. Mariannette Miller-Meeks. October 15, 2024. Accessed October 16, 2024. https://millermeeks.house.gov/media/press-releases/miller-meeks-leads-232-house-members-address-doc-cuts-2025

2. Medicare reform gets bipartisan, majority support. Press release. American Medical Association. October 15, 2024. Accessed October 17, 2024. https://www.ama-assn.org/press-center/press-releases/medicare-reform-gets-bipartisan-majority-support

3. American College of Rheumatology applauds congressional call to address “damaging” cuts in proposed MPFS. Press release. American College of Rheumatology. October 15, 2024. Accessed October 17, 2024. https://rheumatology.org/press-releases/american-college-of-rheumatology-applauds-congressional-call-to-address-damaging-cuts-in-proposed-mpfs

4. MGMA and 120+ organizations urge Congress to fix physician payment. Advocacy letters. Medical Group Management Association. September 10, 2024. Accessed October 17, 2024. https://www.mgma.com/advocacy-letters/september-10-2024-mgma-and-120-organizations-urge-congress-to-fix-physician-payment

5. AMGA urges Congress to reverse Medicare cuts in Physician Fee Schedule rule. Press release. American Medical Group Association. September 25, 2024. Accessed October 17, 2024. https://www.amga.org/about-amga/amga-newsroom/press-releases/9252024