AMA warns of ‘growing gap’ between Medicare pay and cost of physician care
The American Medical Association is warning the federal government of a “growing gap” between what Medicare pays and the cost of delivering care.
The Centers for Medicare & Medicaid Services released the proposed 2025 physician fee schedule in July, incorporating a 2.8% cut to the conversion factor used to calculate physician reimbursement. This marks the fifth consecutive year of payment cuts to the profession under the federal payment program, the association wrote in a comment letter shared Sept. 5.
This conversion factor cut comes despite the Medicare Economic Index rising 3.6%. When adjusting for inflation, Medicare physician payment declined about 29% between 2001 to 2024.
“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,” the AMA wrote to CMS Administrator Chiquita Brooks-LaSure on Thursday. “We strongly urge CMS to acknowledge the negative effects of the proposed payment cut on Medicare beneficiaries in the final rule and the Biden-Harris administration to support any congressional action to replace the cut with a positive update.”
AMA is urging the administration to be “fully transparent” with the public about the impact the cuts could have on patient care. It believes reducing physician pay is “self-defeating,” as it would yank funds away from key White House priorities such as the cancer moonshot and maternal health programs. In 2024, payment for a bilateral screening mammogram dropped 2.5% compared to 2023, the AMA noted. This comes at a time when physician practices are grappling with rising costs for labor and other expenses.
“President Biden has said, ‘[d]on't tell me what you value, show me your budget, and I'll tell you what you value.’ CMS’ statements in this rule about prioritizing behavioral health, advanced primary care, health equity, and cancer prevention are at odds with the proposed Medicare payment rates that would cut physician payment nearly 3% next year,” the AMA wrote.
You can read the full 113-page comment letter, which details possible ways to fix the physician fee schedule, here.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.