Doctors Warn Congress Stagnant Medicare Pay Will Harm Patients

Leaders of the nation’s top physician organizations are warning that Medicare reimbursement to doctors has become unsustainable and threatens to curtail access to care for millions of older Americans if Congress fails to act.

The Centers for Medicare & Medicaid Services’ most recent annual Medicare reimbursement update sets aside a 2.5% pay bump for doctors, a move that drew criticism from the American Medical Association and other physician groups as continuing a decades-long trend of payments not keeping up with inflation.

“This is my 25th year in practice, and my understanding is, if you look at the numbers, it’s a 30-something percent gap between where our costs have gone and where our compensation has gone,” AMA President Bobby Mukkamala said in an interview.

The lagging payments can have real consequences for physicians and their patients. Less money from Medicare puts pressure on practices to make tough decisions to make ends meet, such as reducing support staff and spending more time on administrative work rather than providing care. In some cases, practices are forced to close their doors.

Unlike with health-care entities such as hospitals, hospices, and skilled nursing facilities, Medicare payment updates for doctors’ overhead costs, such as rent, labor, and professional liability insurance premiums, aren’t automatically indexed to inflation.

Because of this, the AMA estimates that Medicare’s payments to physicians have remained relatively flat since 2001, despite the costs of running a medical practice increasing by 63% over the past 25 years.

This concern drew the attention of Congress’s Medicare Payment Advisory Commission, which noted in its June 2025 report to Congress that this growing gap between Medicare payments and physicians’ overhead costs “could create incentives for clinicians to reduce the number of Medicare beneficiaries they treat,” or worse, “stop participating in Medicare entirely.”

The AMA warns that these limited payments could harm seniors’ access to care by increasing their wait times and delaying their care.

Mukkamala says he’s seeing firsthand an increasing number of doctors choosing to opt out of the Medicare program. According to the Journal of the American Medical Association, the share of doctors who have stopped taking Medicare payments altogether has doubled, increasing from 1.8% in 2010 to 3.6% in 2024.

“I’m a private practice ear, nose, and throat physician in Flint. I probably saw about five people this morning alone who came to see me from urgent care. Fifteen, 20 years ago, it would have been maybe five a month. So there’s a shortage,” he added.

Payment Disparities

Physicians also raised concern over the disparity between the amount Medicare pays for services depending on the location where they’re provided. Under current law, services done at independently owned physician practices are often reimbursed at rates much lower than in facilities owned by hospitals.

For example, Dallas-based cardiologist Rick Snyder says Medicare reimburses his office about $135 for an echocardiogram. That same procedure, if done at a hospital outpatient department just one floor below, would have cost Medicare $510.

The AMA estimated that the share of physicians working in private practice fell from around 60% in 2012 to 42.2% in 2024. Seventy percent of physicians in practices that had been acquired by a hospital, private equity firm, or insurer in the last 10 years cited the need to “better negotiate higher payment rates with payers” as very important or important in making their decision.

The American Independent Medical Practice Association says these higher payments have created incentives for hospitals to steadily consolidate physician practices. Once a practice is acquired, it can be rebranded as a hospital outpatient department, allowing the hospital to charge more for the same services.

These costs can trickle down to patients in the form of higher premiums, said Snyder.

“You’re literally buying practices with the government’s money,” said Snyder, vice president of the AIMPA. “So who pays the consequence of that? Certainly, the Medicare beneficiary—grandma and grandpa— because they’re on the hook for 20% of that,” he added.

Potential Solutions

In November 2025, a bipartisan group of legislators, including Reps. Raul Ruiz (D-Calif.), Gus Bilirakis (R-Fla.), Ami Bera (D-Calif.), and Jimmy Panetta (D-Calif.), introduced the Strengthening Medicare for Patients and Providers Act (H.R. 6160), which would revise the Medicare statute to include annual physician payment updates that are indexed to inflation.

Bilirakis said his concern that the dwindling payments would reduce access to care for seniors motivated him to introduce the bill.

“The need for this reform is especially acute in the rural communities I represent, where longstanding provider shortages make consistent, reliable Medicare payments all the more essential,” he said in an email.

Although the bill has support across both parties, the potential long-term costs to the Medicare program have kept similar proposals from crossing the finish line, according to the AMA.

It’s estimated such a policy could cost the Medicare program an additional $65 billion over 10 years, according to the Committee for a Responsible Federal Budget.

The plan also runs the risk of increasing the amount of money Medicare enrollees pay out of pocket for health-care costs, said an industry lobbyist who spoke anonymously in order to comment freely. The CRFB estimates the payment adjustment could increase Medicare premiums for seniors by $30 billion over the same period.

Moving toward a policy of site-neutral Medicare payments could be the solution to this issue, said Snyder.

He pointed to a study by former Congressional Budget Office economist Phil Ellis, which found that adopting consistent Medicare payments regardless of location could save Medicare over $202 billion over 10 years.

“What could you do with that money? What I’ve been lobbying for on the Hill and with HHS—is that’s your pay-for to fix the physician fee schedule,” said Snyder.