Medicare Physician Pay Reduction Renews Calls for System Overhaul

Congress has once again failed to halt a physician pay cut that will affect access to high-quality care by patients on Medicare. In a recently struck deal, the House voted to decrease this year’s proposed pay-cut for physicians by half, with the Senate expected to vote on the same measure.

The need to reform physician payment is dire, with the American Medical Association (AMA) showing that the system in use at the moment is unsustainable. This comes after Medicare physicians received a 2% reduction in their pay in 2023.  In a statement, Jesse M. Ehrenfeld, president of the American Medical Association (AMA) noted that AMA members were disappointed that physician payment cuts under Medicare were allowed to proceed by Congress. Ehrenfeld argued that there was a lot of support as well as many opportunities to stop the Medicare cuts on physician pay that were imposed earlier in the year.

This pay cut, he said, would make it harder for patients to access high-quality care, particularly in underserved and rural areas with independent practices. Additionally, fewer physicians would be willing to accept new patients on Medicare. He added that there was a need to enact permanent payment reform and halt the annual cycle of pay cuts on physician pay.

This is important because patient care and running a medical practice isn’t sustainable for physicians, who were heavily impacted by the coronavirus pandemic as well as staff shortages, inflation and burnout, among others. In his statement, Ehrenfeld urged Congress to focus on Medicare reform and work with relevant authorities such as the AMA to implement solid policy proposals.

Data shows that, in comparison to the 2001 Medicare payment rate, current pay for physicians is 30% less.

Currently, physicians don’t receive automatic inflation increases annually to cover the rising costs of business. Earlier this year, the Medicare Payment Advisory Committee recommended an increase in rates of payment for Medicare, based on an inflation index. Receiving an inflationary adjustment as do other health professionals would have resulted in physicians seeing an almost 5% increase in pay this year.

The American Medical Association is relentlessly advancing fixes to the current pay system, with a focus on the Strengthening Medicare for Patients and Providers Act (HR 2474). This bipartisan measure will offer doctors a yearly and permanent inflationary payment update in Medicare. The measure is being sponsored by Congressman Dr. Larry Bucshon of Indiana, who stated at the recent AMA National Advocacy Conference that both GOP and Democratic lawmakers know this issue needed to be addressed.

As more Medicare physicians become disenchanted with the pay cuts, an increasing load could be imposed upon entities such as Astiva Health that are focused on improving healthcare access and equity to minorities disadvantaged by the existing healthcare system in the United States.

NOTE TO INVESTORS: The latest news and updates relating to Astiva Health are available in the company’s newsroom at https://ibn.fm/Astiva

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