To Preserve Access to Care, Congress Must Repair Medicare’s Broken Payment System

Every year, we witness an alarming decline in the number of doctors offering essential care services. This worrisome trend is partly fueled by many doctors leaving independent small practices, which are being forced to cut back services due to soaring costs, high inflation, and government reimbursement rates below the cost of care.

Christina Downey, MD | Image credit: American College of Rheumatology

This growing financial instability in the Medicare physician payment system threatens physicians’ ability to keep their doors open. It is evident that without congressional intervention to safeguard patients’ access to their doctors, the problem will only continue to worsen. By modernizing Medicare reimbursement rules, Congress can help to alleviate the substantial financial pressure placed on physician practices.

Physician payments impact patients and healthcare providers alike, yet Medicare physician payments have been eroded annually while payments for hospitals, skilled nursing facilities, and other non-physician providers have benefitted from policies that adjust yearly for inflation. According to an analysis of Medicare Trustees data by the American Medical Association, reimbursements to physicians for treating Medicare patients have declined by 26% between 2001 and 2023, when adjusted for inflation. Particularly concerning is that these payment cuts are driving physicians to leave rural and underserved areas, causing thousands of vulnerable patients to be left without access to proper medical care. Many are opting out of the Medicare payment system altogether, leaving our seniors vulnerable.

My peers and colleagues talk often of feeling the strain in tangible ways. The overhead and monetary investments needed to keep a practice going such as support staff salary, building expenses, practice operating expenses, malpractice fees, employee health insurance coverage and even software fees have increased year after year. This has been exacerbated by accelerated inflation post-pandemic. During a time when our operating budgets increase, our positive cash flow has declined. Because of this, physicians are squeezed to their breaking point trying to make up the difference in volume. Patients are not satisfied with this approach, physicians are not satisfied with this approach, and the number of Medicare beneficiaries doctors can care for is limited. These struggles emphasize that the current system is untenable and is failing American doctors and their patients.

Current physicians and their patients are not the only ones struggling with these cuts. As challenges to practicing medicine continue to grow, getting students interested in becoming physicians is also becoming more difficult. Research shows the country needs to train as many as 124,000 additional physicians in the coming decade in order to mitigate our current shortage.

Fortunately, lawmakers in Congress are working to support current and future physicians and protect our communities by addressing part of this problem. A bipartisan group of physician legislators—Representatives Larry Bucshon (R-IN), Raul Ruiz (D-CA), Mariannette Miller-Meeks (R-IA), and Ami Bera (D-CA)—have introduced the Strengthening Medicare for Patients and Providers Act (H.R. 2474). This bill would reform the payment system and enable physicians to receive annual inflationary updates, like all the other parts of the Medicare fee schedule. Additionally, Doctors Caucus Co-Chairs Representatives Greg Murphy (R-NC), Brad Wenstrup, (R-OH), and Michael Burgess (R-TX), working closely with Ways and Means Committee Chairman Jason Smith (R-MO), have released a discussion draft of legislation to reform the budget neutrality policies applied to the Medicare Physician Fee Schedule. This policy would allow for the necessary updates to the physician fee schedule to be implemented without requiring arbitrary cuts to other payments.

Supporting this solution is an obvious win-win, as it would provide physician practices with the stability they need and create a fair payment structure across the whole healthcare landscape. The challenges physicians have faced in the past few years have been extreme, from the pandemic to rising medical costs. Although this legislation will not solve all the problems, passing the Strengthening Medicare for Patients and Providers Act is an essential step in the right direction to preserve the future of our healthcare infrastructure.

Author Information

Christina Downey, MD, is chair of the Government Affairs Committee with the American College of Rheumatology.