Medicare Pay Cut Stands as Congress Passes Budget Bill

Congress did not fix a Medicare pay cut for clinicians in a stop-gap budget measure that appeared headed for passage late Friday. 

The Republican-led Senate voted 62 to 38 to advance a legislative package that will keep federal agencies running through Sept. 30 and avoid a partial government shutdown. A final vote is expected late Friday and the measure is expected to be signed by President Donald Trump. The measure “fails to reverse the Medicare physician pay cut, which endangers access for seniors, especially for those in rural and underserved communities,” said Rep. Frank Pallone Jr. of New Jersey, the ranking Democrat on the House Energy and Commerce Committee, on the House floor earlier this week.

In January, the base rate used in calculating payments in the Medicare physician fee schedule fell by 2.8% to $32.35. This is the fifth consecutive cut in the conversion factor. Congress has to act repeatedly in recent years to prevent even larger cuts, according to a tally kept by the American Medical Association (AMA). 

More than 110 national and state medical groups had appealed in vain to Congress for an easing of this cut through the Continuing Resolution. But work continues on Capitol Hill to try to address the cut, according to Rep. Greg Murphy, MD (R-NC), the co-chair of the GOP Doctors Caucus. 

Support for a Doc Fix

Congress appears to be having a tougher time these days revising its Medicare payment policies for physicians than it did in the past. 

So-called “doc fix” bills were a staple in Congress for decades as lawmakers sought to restrain growing Medicare costs while still adequately compensating clinicians. This has led them to devise and then frequently revise strategies to curb spending, as happened with the sustainable growth rate (SGR) approach. Congress enacted 17 so-called doc fix bills between 2014 and 2023 to prevent cuts it mandated through the SGR approach from taking place.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) did away with the SGR approach. But its goal of paying clinicians more for good performance on quality measures fell short. Congress has repeatedly tweaked MACRA provisions in recent years to try to block or soften slated cuts.

Efforts to ameliorate the latest cuts fell short in December, with AMA President Bruce A. Scott, MD, at the time saying Congress “didn’t even offer doctors a Band-Aid in the form of a cut reduction.”

Scott on Thursday noted that Congress did not fix doctor pay cuts even as their chief Medicare advisory group urged them Thursday to do so. The Medicare Payment Advisory Commission (MedPAC) recommended tying the 2026 physician payment update to the growth in the cost of providing care in its annual March report of recommendations submitted to Congress Thursday.

MedPAC recommended tying 2026 Medicare pay rates to the projected increase in physicians’ operating costs, known as the Medicare Economic Index, minus 1 percentage point. 

The commission again called for additional safety-net payments for doctors serving Medicare patients living in poverty. That would increase in 2026 payment rates by 1.3 percent, MedPAC said.

“With exquisite timing, MedPAC has highlighted how Congress can strengthen Medicare policy,” Scott said in a Thursday statement. “It just makes sense that payment must keep pace with increasing costs. Other providers already have automatic, yearly updates, and physicians are the foundation of health care,” Scott added. 

Kerry Dooley Young is a freelance journalist based in Washington, DC. She has written about medical research and health policy for more than 25 years. Follow her on LinkedIn and Bluesky.