What’s the news: The AMA sent a letter "in strong support" (PDF) of a Senate bill that “takes a meaningful step toward reestablishing Medicare payment stability.”
The Medicare Patient Access and Practice Stabilization Act of 2025, S. 1640, if passed would temporarily reverse the 2.83% cut to the Medicare Physician Fee Schedule Conversion Factor (MPFS) that took effect in January and it would create a 2% positive payment update. The increase equates to roughly half of the 2025 Medicare Economic Index (MEI), which is a measure of cost inflation for physician practices.
“By fully reversing the 2.83% cut and applying a 2% update to the MPFS conversion Factor from June through December 2025, S. 1640 offers physician practices a temporary but important reprieve. It allows practices to better weather inflationary cost pressures while Congress works toward the long-term structural reform that Medicare urgently requires,” wrote James L. Madara, MD, the AMA’s executive vice president and CEO, in the letter to Sen. Roger Marshall, MD (R-Kan.).
Dr. Marshall introduced the Senate bill in May. The bill has a bipartisan House counterpart, H.R. 879, that Reps. Greg Murphy, MD (R-N.C.) and Jimmy Panetta (D-Calif.) introduced in January. The AMA strongly supports that legislation that has so far gained about 170 cosponsors from both sides of the aisle.
The AMA is leading the charge to reform the Medicare payment system.
Why it’s important: Continued cuts to physician payment means that more practices are finding that it is not economically viable for them to keep their doors open, ultimately hurting patients’ access to care.
“This year, the Centers for Medicare & Medicaid Services projected a 3.5% increase in the MEI. Yet physician practices are facing another payment reduction, while other providers, including hospitals and Medicare Advantage plans, are receiving payment updates that at least account for inflationary pressures,” Dr. Madara wrote. “Without immediate legislative intervention, this growing disparity will further destabilize independent practices, accelerate market consolidation, and threaten access to care, particularly in rural and underserved communities.”
In fact, physicians have had to weather Medicare payment cuts for five consecutive years, cuts that came as the cost to pay electric bills, obtain insurance and buy office and medical supplies have skyrocketed. When adjusted for inflation, Medicare physician payments have declined 33% (PDF) since 2001.
“The AMA will work to advance this legislation and looks forward to continued collaboration with Congress on long-term structural reform to protect patient access and stabilize the Medicare physician payment system,” Dr. Madara wrote.
It’s not just the AMA calling for Medicare payment reform for physicians. The 2024 Medicare Trustees report said that “absent a change in the delivery system or level of update by subsequent legislation, the Trustees expect access to Medicare-participating physicians to become a significant issue in the long term.”
Meanwhile, the Medicare Payment Advisory Commission (MedPAC) voted to urge Congress to link Medicare payment updates for physician practices to the growth in the cost of providing care. The recommendation came after Congress this spring didn’t stop or reverse the 2.83% cut that kicked in Jan. 1 despite several proposals to do so.
Learn more: Physicians can contact their senators and urge them to cosponsor the Medicare patient Access and Practice Stabilization Act. Visit the Physicians Grassroots Network page to compose a message.
Learn about the 2.25% Medicare pay update for 2026 that is included in the House budget bill and how the Medicare physician payment update would be tied to 75% of the MEI if the bill is enacted.
Dive deeper to learn how Medicare pay cuts:
- Endanger physician practices.
- Threaten patients’ access to care.
- Especially affect rural America.
- Hit solo physician practices hard.
- Put even big medical groups at risk.
Visit AMA Advocacy in Action to find out what’s at stake in reforming Medicare payment and other advocacy priorities the AMA is actively working on.
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