Medicare Cuts in Physicians' Compensation Threaten Healthcare for Seniors

Access to affordable, high-quality health care is essential — particularly for more vulnerable Americans such as seniors and the disabled. Unfortunately, a dysfunctional Medicare physician compensation system is threatening to undermine access to care. Congress must work to reform the broken Medicare Physician Fee Schedule (MPFS) as a critical element to putting the program on a more sustainable path to protecting and improving seniors’ access to health care.

America’s senior population is the largest it has ever been, and the number of Americans who are 65 years old or older is projected to surge by 47% between 2022 and 2050 — skyrocketing from 58 million to 82 million. As the senior population grows, so, too, will the need to ensure that the Medicare program remains stable and secure. Policymakers must ensure that America’s aging population can access the preventive medicine, critical care, services and support they need to live healthier, longer, more independent lives.

Unfortunately, ongoing cuts to the MPFS, along with increasing medical costs, high inflation, and workforce shortages, are all making it harder for smaller doctors’ practices to stay afloat. Without serious reform to the MPFS, smaller, independent physician practices, particularly those in rural communities, will face increased financial hardships that make it more challenging for them to continue providing care for senior patients.

Physicians nationwide have faced years of successive Medicare fee cuts, and this year was no exception. Medicare is once again proposing a 2.8% cut at a time when the costs of running a medical practice continue to increase.

This situation is unsustainable, so Congress must reverse the latest proposed Medicare payment cuts and enact permanent reforms to the MPFS. Doing so will ensure fair payments for physicians and help protect seniors' access to quality care in the future.

Currently, physicians are the only Medicare providers who do not receive annual, inflation-based payment updates. All other Medicare providers receive such updates that help to offset the costs associated with rising inflation.

The lack of inflationary updates for physicians has created an unlevel playing field that is making it that much harder for physicians to provide care for seniors and Americans with disabilities. According to the American Medical Association, when adjusted for inflation in practice costs, Medicare physician payments declined substantially from 2001 to 2024 — a whopping 29%!

The growing disparity between the true costs of providing care and what Medicare reimburses compounds the financial challenges that physicians face, forcing many smaller practices to scale back their services, stop seeing new Medicare patients, merge with hospitals and healthcare systems, or close their doors altogether. All these options are detrimental to healthcare access for seniors. We’ve seen the effects in other countries when their socialized health systems set artificially low compensation: Eventually, economic reality catches up in the form of severe physician shortages and challenges to access for everyone. We can’t afford to let that happen here.

Lawmakers in Congress must work to address and reform the flawed Medicare Physician Fee Schedule — and soon. Fortunately, a bipartisan group of lawmakers have championed the Strengthening Medicare for Patients and Providers Act (H.R. 2474), which would tie Medicare physician payments to inflation rates, as is the case for other Medicare providers. The bill is a sorely needed stabilizer because it would ensure that physicians are no longer experiencing serious losses for each Medicare beneficiary they serve. It would go a long way toward preventing more office closures and reducing services to seniors, while building the foundation for a strong Medicare system capable of caring for tens of millions more seniors in the decades ahead.

Medicare is a lifeline for millions of seniors nationwide. As America’s population gets older, it will play an even more critical role in ensuring access to high-quality, affordable care for seniors. However, without MPFS reform, growing financial instability among physicians threatens to undermine that access. Congress must fix the broken Medicare physician payment system and preserve seniors’ access to care.

Note: I do not see patients, so I have no pecuniary relationship with Medicare.  A previous version of this article appeared in the South Florida Sun-Sentinel.