ACR says Medicare physician payments are unsustainable, urges congressional action
The American College of Radiology is sounding the alarm over what it calls an “unsustainable” Medicare payment system that threatens the future of independent medical practices and physician training in the United States. Despite increases promised with the H.R. 1 spending bill for the 2026 Medicare Physician Fee Schedule, it does not reverse 25 years of incremental decreases in radiologist pay.
Alan Matsumoto, MD, chairman of the ACR Board of Chancellors and professor and chair of radiology at the University of Virginia, said physician payments under Medicare have dropped 33% since 2000 when adjusted for inflation. Meanwhile, the cost of delivering care due to inflation has surged by approximately 60%, leaving a widening financial gap that many practices can no longer bridge.
"If you look at things the last 25 years, physician compensation dropped by a third, while the cost of inflation over that same time period has gone up about 60%. That deltas make it unsustainable. So that may be why you're seeing some consolidation of private practices, because smaller radiology groups can't survive anymore," Matsumoto explained.
At the same time, payments to hospitals have increased, kept up and actually exceeded the Medicare Economic Index, a measure of inflation.
"This really needs to be fixed because physicians and their practices are not sustainable under the the Big Beautiful Bill. We say that's a start and they recognize the need that there has to be something tied to Medicare Economic Index," he explained.
Although the H.R. 1 budget resolution includes a 2.5% increase to the Medicare Physician Fee Schedule in 2026, Matsumoto said it falls far short of what is needed to reverse decades of erosion in payment.
A ripple effect across radiology education and research
Matsumoto emphasized that inadequate Medicare reimbursement does not just impact physicians, it also threatens the entire ecosystem of the American healthcare system, from patient access to training the next generation of doctors.
He pointed to rising medical student debt, now averaging $265,000 upon graduation, as a barrier to attracting and retaining talented individuals into the profession. Many academic medical centers rely heavily on clinical revenues and federal research dollars to subsidize medical education and innovation, both of which are at risk under the current administration.
"At our institution, profit of the health system funds 50% of the medical school budget, and 30% of the medical school budget comes indirectly from research. So when they start cutting indirect payment from research, it's going to affect education. So the whole health system, educational system and the payment system, they're all interlinked. When you cut one link, the whole fence is broken, and it's hard. That's why physicians want to be involved," Matsumoto explained.
Doctors are calling for collaboration with policymakers
Matsumoto urged Congress and federal agencies to include physicians and scientists in policy discussions to avoid unintended consequences of legislation and regulatory changes. He warned that without input from the people delivering and advancing care, reforms risk destabilizing the very infrastructure they aim to improve.
"Legislators don't understand the ramifications of decisions they're making, because they're not asking people that have the experience in these spaces," he said.
With other challenges, like potential changes to the National Institutes of Health funding and cuts to Medicaid reimbursement looming, Matsumoto said ACR and other physician groups are closely monitoring policy shifts and advocating for a more stable, equitable and forward-thinking healthcare financing model.
"There's no question that if we don't support education and innovation, we're going to not only have a brain drain, we're going to fall behind. And once you fall behind, it costs much more to catch up. So, that's a big concern for the college," Matsumoto said.
He said there is waste in the healthcare system that needs to be addressed not only at the hospital or pharmacy level, but also at the government level. But the clinicians and administrators who are involved in healthcare on a daily basis and understand the interconnections should be involved in policy decisions.
Dave Fornell has covered healthcare for more than 17 years, with a focus in cardiology and radiology. Fornell is a 5-time winner of a Jesse H. Neal Award, the most prestigious editorial honors in the field of specialized journalism. The wins included best technical content, best use of social media and best COVID-19 coverage. Fornell was also a three-time Neal finalist for best range of work by a single author. He produces more than 100 editorial videos each year, most of them interviews with key opinion leaders in medicine. He also writes technical articles, covers key trends, conducts video hospital site visits, and is very involved with social media. E-mail: [email protected]