Industry groups applaud bill connecting Medicare payments to inflation
Healthcare groups are applauding a bill in the House of Representatives that would ensure Medicare payments are tied to inflation.
HR 2474 would tie the Medicare fee schedule to the Medicare Economic Index (MEI), which would institute an annual inflation update. The move was recently recommended to Congress by the Medicare Payment Advisory Commission (MedPAC), though the group only recommended tying payments to 50% of the MEI. Healthcare groups called out MedPAC for the amount, arguing it wasn’t enough.
The bill comes at a time when Medicare physician payment rates have been in a payment freeze through 2026, and physicians saw a 2% payment cut at the beginning of this year. The payment updates are occurring as healthcare providers are still grappling with the COVID-19 pandemic, as well as other economic headwinds, including higher labor costs, staffing shortages, higher costs overall and burnout. Even when the payment hike freeze ends, physician payment updates could be limited to just 0.25%, which is well below inflation, according to the American Medical Association (AMA).
The bill HR 2474 was introduced by several lawmakers who are doctors themselves, Reps. Raul Ruiz, MD (D-CA), Larry Bucshon, MD (R-IN), Ami Bera, MD (D-CA) and Mariannette Miller-Meeks, MD (R-IA).
“This toxic brew threatens health care access for Medicare patients,” AMA President Jack Resneck Jr., MD, said in a statement. “It’s no coincidence that the bill sponsors are physicians. They know the challenges physicians face. The AMA will work with them so the rest of Congress understand that the status quo threatens access to care in communities across our country.”
Other healthcare groups also voiced their support for the bill, including The American Association of Neurological Surgeons (AANS), the Congress of Neurological Surgeons (CNS) and the Medical Group Management Association (MGMA). Here’s what their leaders had to say:
“Medicare physician payments have failed to keep pace with inflation, jeopardizing the viability of physician practices and patients’ timely access to care,” said Russell R. Lonser, MD, FAANS, chair of the Department of Neurosurgery at The Ohio State University and chair of the AANS/CNS Washington Committee. “While we are grateful that Congress has stepped in to mitigate steep Medicare cuts over the past few years, comprehensive reform of the physician payment system must be a priority for Congress this year.”
“Medical practices are in no way immune to record inflation, staffing shortages, and across the board cost increases,” said Anders Gilbers, senior vice president of government affairs at MGMA. “This legislation would allow Medicare to more accurately reflect the impact of the broader economy on practices’ financial stability. We appreciate Representatives Ruiz, Bera, Bucshon, and Miller-Meeks for the introduction of this bill that, if passed, will ensure continued access to care for vulnerable Medicare beneficiaries nationwide.”
According to AMA, physician payments have seen a steep decline over the years, dropping 26% from 2001 to 2023, when adjusted for inflation. This setback in payments could convince some physicians to stop taking Medicare in the future. In particular, small, independent and rural physicians are at a bigger risk of harms from the low Medicare payments, as well as those treating low-income or other historically minoritized or marginalized patient communities. With this in mind, healthcare groups are hoping Congress will adopt the new payment method for Medicare.
“We are deeply worried that many practices will be forced to stop taking new Medicare patients–at a time when access to care is already inadequate,” Resneck said. “Congress often waits until problematic situations become full-fledged crises. Members need to hear from their hometown physicians that we are nearing a crisis. Congress needs to pass this bill stat.”
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."