The American Medical Association (AMA) has called on the Centers for Medicare & Medicaid Services (CMS) to be transparent about the impact of proposed Medicare payment cuts. In July, CMS proposed a 2.8% reduction in payments while estimating that the Medicare Economic Index (MEI), which measures practice cost inflation, would increase by 3.6%. The AMA expressed concerns in a comment letter, urging the administration to collaborate with Congress for a permanent, annual inflation-based update to Medicare physician payments.
"[This] proposed rule is silent on the impact of the growing gap between what Medicare pays for care and what it costs to provide that care. A chorus of authorities on the Medicare program has expressed concern about the ability of patients to continue receiving high-quality care as physician payments erode," stated the letter.
The Medicare Physician Payment Advisory Commission (MedPAC) and the Medicare Trustees have also issued warnings regarding repeated Medicare cuts and their potential threat to access to care. Physicians are one of the few groups of Medicare providers whose payment updates do not account for inflation, leading them to advocate persistently for this change. Adjusted for inflation, Medicare physician payment declined by 29% from 2001 to 2024. The AMA is working alongside organized medicine groups to secure a positive payment update for 2025.
The comment letter highlighted that these proposed cuts could undermine key administration policies such as cancer moonshot and maternal health programs.
"The 2025 cuts compound across-the-board cuts in 2021, 2022, 2023, and 2024, and are not sustainable for physicians and their patients, and risk jeopardizing the Administration’s priorities and access to critical services," noted the letter. "We strongly urge CMS to acknowledge the negative effects of the proposed payment cut on Medicare beneficiaries in the final rule and [urge] the Biden-Harris Administration to support any congressional action to replace the cut with a positive update."
Specific recommendations regarding changes to the Medicare physician fee schedule are included in the full comment letter available here.
