Medicare Death by a Thousand Payment Cuts? AMA Pushes Back!

For the fifth consecutive year, the Centers for Medicare and Medicaid Services (CMS) is threatening to cut payments, this time by 2.8%.

Unacceptable, says the American Medical Association (AMA).

And the AMA is taking this fight to Congress.

According to AMA President Bruce A. Scott, M.D., this is death by a thousand cuts. Five years of cut, cut, and more cuts.

A recent statement issued directly by CMS stated that the cuts were closer to 2.93%. Furthermore, said Dr. Scott, “CMS predicts the Medicare Economic Index (MEI)—the measure of practice cost inflation—will increase by 3.6%.”

With the gap between Medicare’s reimbursement to physician for services and the cost of delivering care to patients growing, the AMA is urging Congress to pass H.R. 2474. “The Strengthening Medicare for Patients and Providers Act [is] a bipartisan bill that would provide a permanent, annual update equal to the increase in the Medicare Economic Index,” Dr. Scott said.

“Additionally, the AMA has a proposal to make Merit-based Incentive Payment System (MIPS) more relevant to patients and supports pending legislation to improve the budget neutrality process to better reflect actual Medicare costs.”

According to Dr. Scott, adjusted for inflation, Medicare physician payment has declined by 29% from 2001 to 2024. For many physicians, this has resulted in the inability to absorb rising costs. Moreover, the Medicare Physician Payment Advisory Commission and the Medicare Trustees have warned against the dangers of repeated cuts to Medicare payments, including the harmful impact on patient access to care.

For now, Dr. Scott says, “The death by a thousand cuts continues. Rural physicians and those treating underserved populations see this CMS warning as another reminder of the painful challenges they face in keeping their practices open and providing care.”

Previous quick fixes to address this issue have been insufficient and “a bold, substantial approach” is needed, the AMA president said. “A Band-Aid only goes so far when the patient is in dire need.”