The Medicare Payment Advisory Commission (MedPAC) has released its latest report to Congress, proposing several payment options that it believes would improve the current Medicare law. The American Medical Association (AMA) has commended MedPAC for recognizing the unsustainable nature of the existing system, which lacks an adequate baseline and inflation-based updates.
"Among the payment options the Medicare Payment Advisory Commission (MedPAC) released today in its report to Congress, all would be a significant improvement over the current law," said a spokesperson from AMA. "We commend MedPAC for recognizing an unsustainable combination: an inadequate baseline and a lack of an inflation-based update. In exploring ways to strengthen Medicare for patients and physicians, MedPAC has alerted Congress that Medicare needs to be put on a healthier path."
Despite acknowledging MedPAC's efforts, the AMA expressed concerns about proposed updates that fall short of matching full inflation rates. According to AMA representatives, such measures could force physicians into difficult financial decisions regarding their practices.
"The AMA remains concerned that an update less than the full inflation rate, as is the case with both approaches under MedPAC’s consideration, would force physicians to make difficult choices about how to keep the lights on and care for America’s seniors and persons with disabilities," stated an AMA representative. "This would be even more problematic following years of declining payment rates and rising inflation."
The AMA advocates for legislative action through H.R. 2474 “Strengthening Medicare for Patients and Providers Act,” which aims to align Medicare physician payments with 100 percent of the Medicare Economic Index.
"The AMA strongly urges MedPAC to support— and Congress to pass—H.R. 2474 'Strengthening Medicare for Patients and Providers Act,' which would update Medicare physician payment by 100 percent of the Medicare Economic Index," urged an AMA official. "Such an update would allow physicians to keep pace with rising practice costs so they can continue to invest in their practices and implement innovative strategies to provide high-value, patient-centered care."
The gap between what Medicare pays physicians and actual delivery costs is widening. Adjusted for inflation in practice costs, there has been a 29 percent decline in physician payments from 2001 to 2024.
"As the commission pointed out, the gap is growing between what Medicare pays physicians and the actual costs associated with delivering high-quality care," noted an AMA spokesperson. "Physician practices cannot continue to absorb increasing costs while their payment rates dwindle."
Furthermore, there are concerns about potential access issues if physician payments remain unchanged.
"According to the Medicare Trustees, if physician payment does not change, access to Medicare participating physicians will become a significant issue in the long term," added another representative from AMA.
The expiration of bonus payments for physicians participating in alternative payment models (APMs) also raises concerns within MedPAC's report.
"The AMA strongly agrees with MedPAC’s concerns about the expiration of bonus payments for physicians who participate in alternative payment models (APMs)," said another spokesperson from AMA. "Congress should continue investing in these payments."
In light of these findings and recommendations from both organizations, reforming Medicare remains a top advocacy priority as declared by this week's meeting of the AMA House of Delegates.
