AMA applauds MedPAC for acknowledging physician pay gap

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The American Medical Association is thanking the Medicare Payment Advisory Commission (MedPAC) for acknowledging during its meeting on Thursday what it called the growing gap between the costs of practicing medicine and what Medicare pays. 

AMA President Dr. Jack Resneck Jr. said the organization's research shows that, adjusted for inflation in practice costs, Medicare physician pay declined 22% from 2001 to 2021, or by 1.2% per year, on average. This widening gap has created instability for physician practices and threatens Medicare patient access to care, Resneck said.

"The AMA strongly urges Congress to stop the 4.5% payment cut scheduled for Jan. 1, 2023, and to work with physicians on wholesale payment system reforms that include inflationary updates reflecting the costs to practice medicine," Resneck said.

WHY THIS MATTERS

The AMA and individual state medical associations sent a December 8 letter to House and Senate leaders to stop the impending 4.5% Medicare Physician Fee Schedule payment cut stemming from statutory requirements for budget neutrality.

The pay cuts come as medical practices throughout the country are experiencing pressures stemming from rising rates of inflation, the letter said.

"All healthcare stakeholders struggle to endure steep, annual payment reductions; however, the negative impact of such policy decisions is exacerbated by the fact that physicians are the only providers whose Medicare payments do not automatically receive an annual inflationary update," the medical organizations said. "This statutory flaw that characterizes the MPFS consistently leads to financial uncertainty and budgetary challenges for all physicians. The stark reality is that, adjusted for inflation in practice costs, Medicare physician pay has declined 22% from 2001 to 2021."

THE LARGER TREND

Last November, lawmakers averted Medicare cuts to physicians and hospitals.

President Joe Biden signed the Protecting Medicare and American Farmers from Sequester Cuts Act into law on Dec. 10, 2021. This instituted an overall .75% physician pay cut on January 1, 2022 and eliminated the 2% sequestration cut until the beginning of April.

Physician groups have long wanted a more permanent solution to statutory pay cuts.

This November, physicians denounced the 4.5% payment decrease in the Centers for Medicare and Medicaid Services final rule caused by statutory-mandated cuts.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org