Urge Members of Congress to provide a Medicare inflation update

August 08, 2023
Area(s) of Interest: Advocacy Public Payors 

The need for Congress to act quickly and decisively to fix a broken Medicare payment system cannot be overstated. The fiscal stability of physician practices and the long-term viability of our nation’s entire health care system hang in the balance.

The government’s own Medicare Economic Index (MEI), which gauges the inflation in medical practice costs, will hit 4.5% in 2024, its highest level in two decades. When combined with the 3.8% hike in the MEI recorded in 2023, that means medical practice costs will have increased 8% over just two years. Many individual and group physician practices have experienced cost increases well beyond this level, while still seeking a full recovery from pandemic-related setbacks.

However, provisions in current law required the Centers for Medicare and Medicaid Services to implement a 2%, across-the-board reduction in Medicare physician payment rates this year, with another 3.36% cut to the conversion factor scheduled for 2024. In stark contrast to the annual payment increases tied to inflation given to hospitals, skilled nursing facilities and other entities that bill Medicare, physician practices have fought to reduce or delay payment cuts nearly every year.

Taking inflation into account, Medicare physician payment rates fell 26% from 2001 to 2023, while practice costs rose by 47% over the same period. We must place physician practices on sound financial ground through Congressional action to fix the Medicare physician payment system.

Legislative Relief

The California Medical Association (CMA) is strongly supporting the Strengthening Medicare for Patients and Providers Act (H.R. 2474), a bipartisan measure now pending in Congress, which would provide the crucial link between the Medicare physician payment schedule and the MEI, and finally put physicians on an equal fiscal footing with other entities drawing Medicare payment. Physicians can contact their representatives in Congress through this portal to urge passage of H.R. 2474.

For those physicians who are meeting virtually or in person with their legislators and staff, the American Medical Association (AMA) has a variety of resources available at FixMedicareNow.org, including plain language explanations of the need for Medicare payment reform.

CMA and AMA intend to fight tirelessly for a financially stable and wholly predictable Medicare physician reimbursement model that protects both physicians and the patients they serve. We urge you to join us in urging Congress to ensure that Medicare continues to fulfill its crucial role in safeguarding both the health and financial well-being of tens of millions of Americans.




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