AMA praises MedPAC vote to increase physician payment rates

American Medical Association (AMA) leaders lauded the Medicare Payment Advisory Commission (MedPAC) Thursday for backing increased physician payment rates for 2025.

AMA President Jesse Ehrenfeld praised MedPAC, a nonpartisan independent legislative agency that advises Congress on the Medicare program, for endorsing a draft recommendation that urges lawmakers to increase physician payment rates to reflect inflation. He cast the move as “a critical first step toward the necessary work of reforming the broken Medicare payment system.”

“Long-term reforms from Congress are overdue to close the unsustainable gap between what Medicare pays physicians and the actual costs of delivering high-quality care. When adjusted for inflation in practice costs, Medicare physician pay declined 26% from 2001 to 2023,” he said in a statement. “It is urgent that Congress act now to reverse the 3.37% Medicare cut that took effect on January 1, 2024, and tie future updates to inflation to prevent the problem from getting worse.”

The AMA leader appealed to Congress to specifically “adopt inflation-based updates to Medicare physician payment by passing HR 2474, the Strengthening Medicare for Patients and Providers Act.”

Federal law requires MedPAC to review Medicare’s fee-for-service payment policies and make payment update recommendations each year. The commission is set to report to Congress in March on the adequacy of payments to physicians and health professionals and whether they should be updated in 2025.

MedPAC also examined payments for hospital inpatient and outpatient services; dialysis, hospice, home health agency, and skilled nursing facility services; and inpatient rehabilitation facility services at its January 11 meeting.