Valuing the Care Provided by Internal Medicine Physicians

Physician Compensation

Issue: Protect patients’ access to care by ensuring fair and appropriate physician compensation, including annual inflationary adjustments, and policies that support physicians’ transition from fee-for-service (FFS) to value-based models of care.

Why is Action Needed?

Physicians continue to work in a flawed Medicare payment system that fails to keep up with rising practice expenses and the cost of caring for their patients. Unlike nearly every other segment of the Medicare payment system, the Medicare Physician Fee Schedule does not include annual inflationary adjustments. As a result, when accounting for inflation, current Medicare physician payment rates have decreased by a staggering 26 percent since 2001.

Not only have Medicare payment rates fallen below the rate of inflation, but physicians have also faced Medicare payment cuts over the past few years. On January 1, 2024, CMS implemented a 3.4 percent across-the-board cut to physician payment in Medicare. This broken, inadequate payment system is not sustainable and threatens access to care for seniors.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) has also failed to meet the Congressional intent of helping clinicians in Medicare transition away from fee-for-service, or volume-based payments to value-based models of care. MACRA is intended to introduce value-based components into fee-for-service via the Merit-based Incentive Payment System (MIPS) and for CMS to offer robust options for physicians to transition into advanced alternative payment models (APMs) that deliver value-based care; however, most physicians continue to practice in fee-for-service models with few incentives or options to join advanced APMs.

ACP’s Position

We continue to urge Congress to ensure that the Medicare Physician Fee Schedule provides physicians with positive and stable payment updates consistent with the Medical Economic Index that adequately reflect the increased costs in their practice due to inflation. We support the implementation of a new payment code, G2211, to address the resources and costs associated with furnishing comprehensive, longitudinal primary care. We also urge that Congress reform MACRA to ensure that it better facilitates a value-based physician payment system and moves the needle toward achieving greater equity in the delivery of health care.

Call to Action

  • Enact H.R. 6683, the Preserving Seniors Access to Physicians Act of 2023, which would eliminate the 3.4 percent Medicare payment cut that was implemented on January 1, 2024.
  • Enact H.R. 6545, the Physician Fee Schedule Update and Improvements Act, to raise the threshold to implement budget-neutral payment cuts in Medicare to $53 million and use cumulative increases in the Medicare Economic Index to update the threshold every five years afterward.
  • Reform MACRA to ensure that it facilitates a value-based payment system and pass H.R. 5013, the Value in Health Care Act of 2023, that would increase and extend incentive payments for physicians to join advanced APMs.