The Medicare Payment Advisory Commission released a new report to Congress on March 15, and some leaders are saying its recommendations for physician payments are flawed.
The report calls for a roughly 3% year-over-year pay increase for physicians. The report estimates physicians would receive 3% higher Medicare payments year following the update.
"Under current law, Medicare fee schedule payment rates are expected to decline in 2025, due to the expiration of a 1.25% pay increase that will apply in 2024 only and a 0% update scheduled for 2025," the report said. "Given recent high inflation, cost increases could be difficult for clinicians to continue to absorb. Yet current payments to clinicians appear to be adequate, based on many of our indicators."
American Medical Association President Jesse Ehrenfeld, MD, said in a March 15 statement the increase is "desperately needed" but inadequate as physicians face cyberattacks, years of Medicare cuts, COVID-19 and inflation.
The report also recommended tying physician payments to the Medicare Economic Index, which Dr. Ehrenfield said is a "smart policy and desperately needed." The AMA added that Congress should require the index to better reflect inflation.
"MedPAC's decision recognizes that physician pay is lagging far behind the cost of practicing medicine," Dr. Ehrenfield said. "Yet an update tied to 50% of MEI — as MedPAC recommended — will cause physician payment to fall even further behind increases in the cost of providing care."
The move comes after Congress released a $460 billion spending package to mitigate Medicare's pay cut for physicians, but still cutting pay by 1.7%. The package would temporarily lower the 3.4% Medicare physician fee cut, which took effect in January, until Jan. 1, 2025.
"Today's MedPAC recommendation to provide a 50% inflationary update for physician services in 2025 is woefully inadequate," Anders Gilberg, senior vice president of government affairs of the Medical Group Management Association, said in a statement. "I am mystified why MedPAC even bothers to make an annual recommendation while it ignores the significant Medicare cuts to physicians in 2024 and recent years."