Looming end of Medicare rural pay adjustment raises concerns about doctor shortages
The federal policy that helps equalize Medicare physician payments in rural and urban areas is scheduled to expire at the end of 2025, sparking concern among medical groups that rural communities could face worsening physician shortages if the adjustment is not renewed.
The policy, known as the Geographic Practice Cost Index (GPCI) adjustment, modifies how Medicare calculates payments to physicians to account for regional differences in the cost of running a medical practice. In rural areas, where physician work relative value units (RVUs) often fall below the national average, Congress has repeatedly applied what is known in Washington as the “GPCI floor” to ensure doctors receive payments more comparable to those of their urban counterparts.
Anders Gilberg, MGA, senior vice president of government affairs at the Medical Group Management Association (MGMA), said allowing the adjustment to lapse would immediately disadvantage physicians in rural communities.
“If Congress lets the GPCI adjustment expire, physicians in rural areas will see their Medicare payments reduced midyear,” he explained. “That would put them at a disadvantage compared with their urban colleagues. At a time when recruiting and retaining doctors is already difficult, this could be the straw that breaks the camel’s back.”
Recruitment struggles have already escalated since the COVID-19 pandemic, Gilberg noted, with many physicians leaving practice due to burnout, retiring early, or moving into higher-paying industry jobs. The U.S. also is not graduating enough new doctors to replace those leaving the field, leading to shortages in most specialties. Rural practices, which often operate on thinner margins, have found it particularly difficult to fill openings for specialists such as cardiologists and radiologists—sometimes waiting months or even years to fill a position.
If Congress does not renew the GPCI payment adjustment, Medicare payments will penalize physicians for practicing in rural areas, which will only exacerbate the access problem, Gilberg explained.
"There are not enough cardiologists and radiologists in this country to go around. Reducing the geographic price indices—or other potential inequities in payment—that could hurt rural areas more than urban or suburban areas and put those areas at a disadvantage and create persistent access to care problems," he said.
MGMA and other physician advocacy groups are urging Congress to extend the GPCI floor beyond 2025 as part of the upcoming Medicare Physician Fee Schedule legislation. Without action, rural physicians could face lower reimbursement rates starting in 2026, potentially accelerating the closure of small practices and limiting access to care for millions of patients outside urban centers.
Gilberg said the geographic adjustment has been extended many times before to prevent rural healthcare patients from being left without doctors to care for them. However, there are concerns as a more conservative Congress is looking to cut costs across the federal budget.
"If Congress lets the GPCI adjustment expire, it's just one more piling on factor that might be the straw that broke the camel's back. So it's something we are going to work very hard to avert. MGMA as well as the physician community is very much on top of this," he added.
For more, look above for the full video interview.
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]