Deeply alarmed about the growing financial instability of the Medicare physician payment system, the California Medical Association (CMA) and 120 other organizations have endorsed the American Medical Association’s (AMA) new Medicare payment reform principles. The principals—outlined in Characteristics of a Rational Medicare Physician Payment System—provide a framework to reshape the Medicare payment system so that it works better for patients and physicians, and put an end to the annual advocacy exercise of stopping impending payment cuts. 

Due to a confluence of statutory payment cuts, lack of inflationary updates, significant administrative burdens and fiscal uncertainties physician practices face related to the pandemic, the Medicare payment system is on an unsustainable path threatening patient access to physicians.

According to data from the Centers for Medicare and Medicaid Services (CMS), inflation has risen by 40% over the past two decades, while physician payments have only risen by 7% during that time. Adjusted for inflation, this amounts to a 20% physician payment cut. This stark disparity shows the dire need for physician payments to be indexed to inflation, similar to hospital payments.

The AMA framework represents the first stage in medicine’s effort to develop and propose substantial changes to the payment system to improve the financial viability of physician practices and ease its administrative burdens.

CMA is advocating for these Medicare payment reforms before Congress and CMS.

For more information on the AMA reform principals, click here.

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