Society Calls for Policymakers to Reform the Medicare Physician Payment System

August 11, 2022
Policy Snapshot

Diverting the Medicare physician payment system away from its current unsustainable path and steering it instead toward physician practice sustainability will protect patient access to quality, evidence-based care while easing administrative burdens.

The Society has joined other state and national specialty societies such as the American Medical Association in advocating for a practical, commonsense approach reforming Medicare physician reimbursement based on the principles of simplicity, relevance, alignment, and predictability.

The Society has long advocated for a more equitable reimbursement system that attracts clinicians to post-acute and long-term care (PALTC). The current clinician shortage in PALTC that was exacerbated by the COVID-19 pandemic underscores the need to create a stable system that rewards clinicians who take care of the most vulnerable and medically complex individuals.

The need for change is clear. Taking inflation in practice costs into account, Medicare physician payments plunged 20% from 2001 to 2021. Medicare spending on physician services per enrollee retreated by 1% between 2010 and 2020, even as spending per enrollee for other parts of Medicare jumped up between 3.6% and 42.1%.

With inflation soaring to 40-year highs this year, statutory payment cuts looming, and many physician practices still dealing with pandemic-related financial issues, the current proposal from the Centers for Medicare & Medicaid Services (CMS) undermines the long-term sustainability of physician practices while threatening patient access to physicians participating in Medicare.

The Society looks forward to working with Congress and the federal agencies to find long-term solutions to this long-standing problem.