Medicare Physician Pay Keeps Falling Behind. What the Patients First Act Could Change

Every year physicians face the same frustrating question. Will Medicare cut payments again while the cost of running a practice keeps climbing? For many of us this is no longer just a line on a spreadsheet. It shapes staffing, appointment availability and whether we can keep caring for Medicare patients at all.

The bipartisan Patients First Act of 2026, introduced as H.R. 9693, proposes a different approach to Medicare physician payment. Instead of another round of temporary fixes, it aims to build a predictable system that reflects what it actually costs to deliver care. The real question is whether Congress will act before more practices reach their limit.

Why Medicare Physician Payment Keeps Falling Behind

Physicians have raised this concern for years. The problem is not only that payments are low. It is that reimbursement has failed to keep pace with the rising cost of care. According to the American Medical Association, Medicare physician payment has declined about 33 percent since 2001 when adjusted for inflation in practice costs.

Meanwhile physician practice costs keep rising. Medical assistants, nurses and front desk staff need competitive salaries. Rent, equipment, malpractice coverage, electronic health records and compliance all demand ongoing investment. None of those expenses pause when Medicare rates stay flat.

Picture a small internal medicine practice with a large Medicare panel. The physician wants to hire another nurse to tighten follow up and shorten wait times. Payroll has gone up. Medicare has not. So the hire gets postponed, a service gets trimmed or new Medicare appointments get limited. None of those choices helps patients. Yet they are the choices more of our colleagues are quietly making.

What the Patients First Act Would Change

The bill was introduced by three physicians in Congress: Representatives John Joyce, Kim Schrier and Greg Murphy. It goes after structural problems in the payment system rather than relying on yet another short term patch.

Its centerpiece is a permanent annual payment update linked to the Medicare Economic Index. The MEI tracks the cost of operating a physician practice, including staff and the other inputs we need to see patients. Updates would follow that index, with built in limits and adjustments.

That detail matters. The bill would not guarantee every physician an increase equal to full practice cost inflation. It would create a predictable yearly adjustment. For anyone trying to plan hiring, buy equipment or keep an independent practice running, predictability has real value. You cannot plan responsibly when reimbursement is a guess every January.

Fixing Budget Neutrality and Outdated Practice Cost Data

Another long running frustration is budget neutrality. Under current rules, certain payment increases must be offset by reductions elsewhere in the physician fee schedule. The goal is to control Medicare spending. In practice we often feel these offsets as cuts with little connection to our workload or overhead.

The Patients First Act would raise the budget neutrality threshold, which has not changed in decades, and cap the size of annual adjustments. It would also create a process to correct inaccurate utilization estimates. That matters because payment decisions often rest on projections of how often services will be used. When those projections miss, physicians can carry the financial consequences for years.

The bill also calls for regular updates to the inputs used to calculate physician practice costs. Wages, equipment prices and supplies change. Payment math should keep up. These reforms would not solve every reimbursement problem. They could remove some of the surprise adjustments that make financial planning so hard.

Less Paperwork and More Meaningful Quality Measures

Payment rates are only part of the story. We also spend a great deal of time on reporting that does not always reflect better care. The Merit Based Incentive Payment System has drawn steady criticism for its complexity and administrative load.

The Patients First Act would set up a physician led process to develop simpler and more clinically relevant quality measures. It also aims to widen real opportunities to join alternative payment models.

Think of a primary care physician who spends the morning managing diabetes, heart failure and a tangle of medication interactions. After the last patient leaves, the day is not over. Documentation and quality reporting are still waiting. Some measurement is necessary and accountability matters. Quality programs should help us improve care rather than add paperwork with little clinical value. Whether this part of the bill truly lightens the load will depend on how it is implemented.

What This Means for Patients and Practices

This debate is sometimes framed as an argument about how much doctors should earn. That misses the point. A practice cannot offer accessible, high quality care if it cannot afford to stay open.

When financial pressure becomes unsustainable, practices cut staff, sell to larger systems, drop services or stop taking new Medicare patients. Patients then face longer waits and fewer choices. The effect is sharpest in rural and underserved areas where alternatives are already thin.

Consider an older patient with several chronic conditions who has seen the same physician for a decade. If that practice closes or stops accepting Medicare, finding a new doctor can take months. Continuity suffers and so does the patient.

More predictable Medicare physician payment could help stabilize practices and protect access. Still, legislation alone will not fix workforce shortages or administrative waste. Payment reform is necessary. It is not the whole solution.

What Physicians Can Do Before Congress Acts

The Patients First Act is still proposed legislation. It has not become law. With the lame duck session approaching, physician organizations are urging clinicians to speak up now. You do not need to be a policy expert to make a difference.

• Contact your representatives and explain how reimbursement affects your practice, staff and patients.

• Share concrete examples such as a delayed hire, a service you dropped or a waitlist that keeps growing.

• Work through your state medical society, specialty society or the AMA.

• Follow H.R. 9693 and help colleagues understand what is at stake.

Lawmakers may understand payment formulas. They also need to hear what those formulas mean for a physician trying to keep a rural clinic open or a primary care practice fully staffed. That story is one only we can tell.

The Future of Medicare Payment Depends on Physician Voices

For too long Medicare physician payment has been managed through temporary patches while the deeper problems stayed in place. The Patients First Act offers a chance to change that. Updates tied to practice costs, saner budget neutrality rules and simpler quality reporting could bring real stability to physicians and the patients who depend on them.

The proposal is not perfect, and its impact will depend on the final text and how it is carried out. But the current cycle of uncertainty is not sustainable. Physicians should not have to choose between keeping the lights on and giving patients the care they deserve.

We want to hear from you. How have Medicare reimbursement changes affected your practice? Have you delayed hiring, cut services or limited new Medicare patients? Share your experience with fellow physicians in the MedSocially community and help shape this conversation.