As the AARP sounds the alarm on the nationwide physician shortage, the Texas Medical Association and Physicians Advocacy Institute (PAI) have responded to illustrate how Medicare payment cuts significantly challenge physicians’ practice viability.
A recent AARP Bulletin article, “Where Have All The Doctors Gone?,” contends health care is in “a crisis that’s getting worse,” as “the current shortage of physicians, combined with a number of other factors, has placed such an intense strain on doctors that many in the medical field are choosing to switch professions or simply retire early.”
However, the article does not discuss the thin margins many physicians operate under due to insufficient Medicare payment – and health plans keying off Medicare rates to set their payment rates.
“Health care is indeed in crisis, and we agree with you that access to care is of great concern,” TMA Executive Director & CEO Michael J. Darrouzet wrote in a letter to AARP co-signed by PAI CEO Kelly Kenney. “This is a complex issue that demands urgent attention. But it is also a story that is incomplete without acknowledging an important structural challenge: perennial cuts in Medicare payments to physicians.”
While Medicare payments to hospitals have increased 60% from 2001 to 2024, payments to physicians over that same period have decreased by nearly 30% when adjusted for inflation, the letter continues. Noting cuts are occurring “in times of high inflation, with higher labor and overhead costs,” the letter characterized the Medicare fee schedule as an “underinvestment in physician services” that is contributing to widespread physician burnout – 60% of doctors per a recent Physicians Foundation survey – and jeopardizing independent physician practices.
“More than half of physicians who left independent practice to become employees of corporate-owned systems said declining reimbursement was a driving factor in their decision,” according to a PAI study by NORC at the University of Chicago.
To mitigate the burden of the most recent Medicare cuts, TMA, along with the American Medical Association and nearly 130 state and national medical organizations, recently called for Congress to pass House Resolution 879 in a Feb. 10 letter to Congressional leaders. The legislation might be taken up as early as March 14, Congress’ deadline to fund the federal government.
The proposed legislation would stop the 2.83% pay cut from April 1 through Dec. 31, 2025, and provide a 2% payment increase to offset a fraction of the recent rounds of cuts.
Take action and support for HR 879 through a ready-made action alert for contacting your representative and follow TMA’s advocacy efforts on the state and federal level. Your voice counts.
Last Updated On
February 24, 2025
Originally Published On
February 24, 2025
Phil West
Associate Editor
(512) 370-1394
phil.west[at]texmed[dot]org
Phil West is a writer and editor whose publications include the Los Angeles Times, Seattle Times, Austin American-Statesman, and San Antonio Express-News. He earned a BA in journalism from the University of Washington and an MFA from the University of Texas at Austin’s James A. Michener Center for Writers. He lives in Austin with his wife, children, and a trio of free-spirited dogs.