The fight for fair Medicare payment continues 

By Jarrod Fowler, MHA
FMA Director of Health Care Policy and Innovation

The Medicare Payment Advisory Commission (MedPAC) recently recommended that physicians receive payment updates ranging from 0.75% to 1.25% in 2027. However, because the temporary 2.5% payment update for 2026 will expire next year, MedPAC’s recommended increase would amount to a net negative of 1.25% to 1.75% in 2027. Once again, physician advocacy organizations will have to fight to prevent a Medicare payment cut.

The Medicare conversion factor has already declined 33% since 2001, using the Medicare Economic Index (MEI) to gauge inflation. High inflation combined with low payment updates is simply not a sustainable formula. As the Medicare Board of Trustees has reported, “Certain features of current law may result in some challenges for the Medicare program. For example, physician payment update amounts are specified for all future years. These amounts do not vary based on underlying economic conditions, and they are not expected to keep pace with the average rate of physician cost increases. These rate updates could be an issue in years when levels of inflation are high and would be problematic when the cumulative gap between the price updates and physician costs becomes large.”

In other words, it is necessary to have a mechanism that accounts for inflation when updating physician fees annually under the Medicare program, such as tying updates to MEI (a measure of inflation that tracks practice costs). As the largest medical society in a state with more than five million Medicare beneficiaries, the FMA understands that these looming 2027 Medicare payment cuts could harm access to care and limit options for vulnerable seniors. We will continue advocating for physicians to receive fair payment updates, opposing arbitrary and harmful cuts, and keeping our members informed.