TMA Fighting to Stop Yet Another Medicare Pay Cut – and Looking for System Overhaul
By Emma Freer

After decades of Medicare physician pay cuts – the latest of which is set to take effect on July 1 – the Texas Medical Association and others in organized medicine have set their sights on comprehensive reform.

TMA President Gary Floyd, MD, says such a “huge” shift is necessary given that physicians haven’t seen a substantial Medicare pay raise in 20 years, curtailing their ability to accept additional Medicare patients and making it harder to keep their practice doors open.

In the short term, however, medicine is focused on stopping the next cut coming in less than a month.

Last year, TMA successfully pushed back against a proposal by the Centers for Medicare & Medicaid Services (CMS) to cut Medicare physician payments by nearly 10% in 2022, ultimately reducing the cuts by more than two-thirds.

An overall .75% physician pay cut took effect on Jan. 1, followed by a temporary, three-month 1% cut on April 1. A third, permanent 2% cut is due on July 1, which will raise the physician pay cut from 1.75% to 2.75%, barring congressional intervention.

TMA, along with other state medical organizations and the American Medical Association is asking Congress to act immediately.

Lawmakers are “notorious for [waiting until] the last two days or the last week [before] they pull a rabbit out of their hat,” Dr. Floyd said. “And I hope they do.”

Long-term goals

And with its sights on the longer term as well, TMA has joined a chorus of state medical and national specialty societies, led by AMA, that are calling for an overhaul of the Medicare physician payment system.

"Physicians, to run their practices, can’t absorb more cuts to what Medicare pays for services,” Dr. Floyd said, adding that because Medicare has become the payment standard against which other payers set their rates, its ripple effects are far-reaching.

In late May, AMA released a set of TMA-endorsed principles – the Characteristics of a Rational Medicare Physician Payment System – to guide advocacy efforts, calling on Congress to:

  • Provide a baseline annual physician pay raise to keep up with inflation;
  • Eliminate, replace, or revise so-called budget neutrality requirements, which require any physician pay increase or decrease to be offsetting;
  • Incentivize value-based care; and
  • Reduce health disparities.

“This 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,” AMA said.

Between 2001 and 2020, Medicare physician payments decreased 22% when adjusted for inflation, whereas payments for other health care professionals have generally kept pace with inflation, according to AMA. Over the same period, the consumer price index for medical care in U.S. cities increased 95%, according to the U.S. Bureau of Labor Statistics.

Although physicians continue to deal with rapid inflation and the ongoing COVID-19 pandemic, there is little sign of relief from this Medicare payment rigmarole.

The Medicare Payment Advisory Commission (MedPAC), a key Medicare advisory panel, recently recommended no fee-for-service physician payment update in 2023 – meaning no increase or decrease. However, MedPAC did recommend an increase for other Medicare payment systems, including inpatient hospitals.

Still, there are reasons to believe Medicare physician payment reform – as envisioned by TMA and others in organized medicine – is possible.

During a March 17 press briefing, U.S. Health and Human Services Secretary Xavier Becerra said he’s “definitely interested” in reform, as reported by MedPage Today. He also shares organized medicine’s concerns that Medicare physician payment could push physicians into early retirement or other careers altogether.

AMA CEO James Madara, MD, expressed appreciation for Mr. Becerra’s engagement on the topic in a March 30 letter, writing, “We know from our discussions on [Capitol] Hill that hearing from the Secretary of Health and Human Services … has added tremendous credibility to this concern.”

Dr. Floyd says federal lawmakers seem more aware of the flaws in the current Medicare physician payment system and more receptive to physician input than in the past. But he is guarded in his optimism.

“The proof is true action, and, so far, we have no action,” he said.

Last Updated On

June 08, 2022

Originally Published On

June 08, 2022

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Emma Freer


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Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

More stories by Emma Freer