Congress has failed practices again

Christopher Mazzolini

There's many reasons why Congress as an institution has terrible approval ratings, usually hovering below 30%. The low opinion of our national legislative body defies partisan politics and many other indicators that often shift public perception.

Well there's a reason why physicians, in particular, are angry with Congress: Medicare reimbursement rates keep dropping while the cost to run a practice keep rising.

To get a quick visual of the problem, refer to this American Medical Association chart:

Source: AMA

This version of the chart doesn't include 2025, but I'm sure one is in the works because everything got worse. In 2025, physicians are dealing with a 2.83% reduction. There's was an effort in late 2024, in the lame duck session of the previous Congress, to restore this cut but it failed. There was some efforts to restore the cut during the negotiations last week during the government shutdown bruhaha, but those never really gained enough momentum.

After the budget stopgap bill passed, and there was no fix to physician reimbursement, the AAFP had this to say, via a statement from their president Jen Brull, MD:

"First and foremost, family physicians are disappointed that Congress is choosing not to address cuts to Medicare payment, making it harder for practices to keep their doors open and for patients to access care. This marks five consecutive years that physicians have experienced cuts in their Medicare payments, further eroding the stability of the practice environment and threatening access to physician care for millions of seniors. We, along with the entire physician community, continue to advocate in support of an annual inflationary update to Medicare physician payment based upon the Medicare Economic Index."

When the Physician Fee Schedule was published in 2024 and this cut was revealed, all the usual voices in physician advocacy urged Congress to act. AMA President Bruce A. Scott, MD, said this in July 2024:

“With CMS estimating a fifth consecutive year of Medicare payment reductions — this time by 2.8% — it’s evident that Congress must solve this problem. In addition to the cut, CMS predicts that the Medicare Economic Index [MEI]—the measure of practice-cost inflation—will increase by 3.6%. Facing this widening gap between what Medicare pays physicians and the cost of delivering quality care to patients, physicians are urging Congress to pass a reform package that would permanently strengthen Medicare."

This is one of the big reasons practices, primarily independent primary care practices, are struggling. It's no wonder that so many are selling off to hospitals or private equity. Doctors are dealing with a ton of challenges all at once, and seeing their reimbursement shrink while costs to do business increase is a major problem. I think every patient in America can relate as we've all been dealing with the ups and ups of inflation in the last few years.

From a physician perspective, Medicare reimbursement policy has always been a mess, and whatever system they design seems to require last minute congressional intervention that sometimes works, and sometimes doesn't. Remember the sustainable growth rate formula? Better if you don't!

Lost in the legislative drama is what's happening on the front lines, with the physicians who are focused on seeing patients and dealing with the reimbursement and policy mess as it falls down upon them.

"If they are going to cut reimbursement, we have to think about how we can cut with having the least impact on our patients, our communities, and ourselves," said Kip Beals III, MD, a primary care physician in Pennsylvania who has spent time in his 35 year career in both independent practice and larger health institutions. (You can listen to our full interview with Beals at our Off the Chart podcast).

So what should Congress do to address this so that physicians like Beals can actually take care of their patients and improve the primary care in this country?

One idea came from MedPAC, the Medicare payment advisory committee that reports to Congress. They recommended at their March meeting:

• Congress should replace the current law updates to the physician fee schedule with an annual update based on a portion of the growth in the Medicare Economic Index (MEI). An example could be: MEI minus 1 percentage point.
• Congress should direct the HHS secretary to improve the accuracy of relative payment rates for clinician services by updated costs data regularly, and ensuring the methodology used to determine payment rates for different services reflects the settings in which clinicians practice medicine.

Will Congress listen to MedPAC? Will anything change for the better? Only time will tell.

Chris Mazzolini is a content vice president at MJH Life Sciences, overseeing a roster of brands including Physicians Practice, Medical Economics and Pharmaceutical Executive.

Be sure to check out The Mazz Report on LinkedIn for more insight into the business of medicine.