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Medicare Payment Reform

Declining Medicare reimbursements threaten seniors’ ability to access timely care as well as the long-term sustainability of physician practices

Diverting the Medicare physician payment system away from its current unsustainable path and steering it instead toward physician practice sustainability will protect patient access to quality, evidence-based care while easing administrative burdens.

The American Medical Association, together with the WSMA and other state and national medical societies, have outlined a practical, commonsense approach reforming Medicare physician reimbursement based on the principles of simplicity, relevance, alignment and predictability.

Why We Must Reform the Medicare Physician Payment System

The need to address the growing instability of Medicare physician payment is overdue. Unlike other Medicare fee schedules, physicians do not receive an annual payment update that adequately accounts for increases in the cost of delivering care. As a result, inflation-adjusted Medicare physician payment has declined approximately 33% since 2001, while the costs associated with staffing, technology, regulatory compliance, and other practice expenses have continued to increase.

Compounding the problem of low and eroding reimbursement is the fact that insurers increasingly use Medicare as their baseline for payment standards. “The rates for much of commercial insurance, which in the past had cross-subsidized Medicare and Medicaid, are trending toward Medicare,” says WSMA President (2021-2022) Mika Sinanan, MD, PhD. “They say you have to live and work at a Medicare level.”

With inflation soaring to 40-year highs, statutory payment cuts looming, and many physician practices still dealing with pandemic-related financial issues, recent proposals from the Centers for Medicare and Medicaid Services undermine the long-term sustainability of physician practices while threatening patient access to physicians participating in Medicare.

Legislation and Advocacy

Medicare payment reform will not happen without sustained advocacy. Please take a few minutes to contact your members of Congress and senators, whether that’s by attending a local town hall meeting, participating in a fundraiser, or sending them an email. We need their engagement and support on these important reforms. The stakes are high, not only for physicians and medical practices, but for the Medicare patients who depend on continued access to care in their communities.

More information on the Medicare payment cuts can be found at fixmedicarenow.org/resources.

Medicare Payment Reform Issue Briefs