April 10, 2023
The California Medical Association (CMA) applauds the bipartisan introduction of a bill that would require an annual inflation-based update for Medicare physician payments.
The bill—H.R. 2474, the “Strengthening Medicare for Patients and Providers Act”—was introduced by California congressional representatives Raul Ruiz, M.D. (D-CA) and Ami Bera, M.D. (D-CA) and their Republican partners Larry Bucshon, M.D. (R-IN) and Mariannette Miller-Meeks, M.D. (R-IA).
Starting in 2024, the bill would provide an automatic, annual inflation update to the Medicare Physician Fee Schedule tied to the Medicare Economic Index (MEI) – similar to the updates all other Medicare providers receive. The MEI is a reasonable market-basket index of physician practice costs. By tying physician fees to the MEI, the bill will bring much-needed stability to physician practices and protect patients’ access to medical care in California, particularly in our underserved areas and low-income communities of color.
Medicare physician payments have failed to keep pace with the costs of providing care over the last two decades. During that period, Medicare hospital and nursing home payments increased by 60%, inflation rose by 50%, and the MEI climbed by more than 40% while physician payment remained stagnant. When adjusted for inflation, physician payments have declined 26% from 2001-2023.
“CMA physicians have been sounding the alarm that health equity and health care access in the Medicare program are deteriorating and we need Congress’s leadership to restore the promise of Medicare to our patients,” said CMA President Donaldo Hernandez, M.D. “Congress must shore up the viability of physician practices to meet the mountain of growing health care needs in our communities. We urge the California Congressional Delegation to prioritize and co-sponsor this vital legislation.”
Medical practices across the country are experiencing unprecedented financial pressures stemming from higher practice costs due to record-setting rates of inflation, the ongoing COVID-19 recovery, and significant administrative burdens.
The increasingly thin or negative operating margins are driving both primary care and specialist physicians out of Medicare and seriously threatening access to care.
The recent Medicare Trustees Report said lawmakers should “expect access to Medicare-participating physicians to become a significant issue in the long term” without a change in law. And a 2022 CMA survey of physicians revealed the following:
- 76% said Medicare payments do not cover their costs to provide care
- 41% said they may close their practice to new Medicare patients
- 45% are planning early retirement
CMA has heard from physicians who report that there is not a single primary care physician or psychiatrist accepting new Medicare patients in their vicinity – including in large urban areas – and patients in rural and traditionally underserved areas are particularly affected by long delays or long distances to get care.