Medicare and Medicaid Reimbursement: A Broken System
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Colleagues:
For more than two decades, physicians in New York and across the country have faced a reimbursement system that is increasingly unsustainable. The Medicare Physician Fee Schedule, which serves as the foundation for physician payment, has not kept pace with inflation, rising practice costs, or the growing complexity of modern healthcare.
According to analysis by the American Medical Association, professional reimbursement for physicians has declined approximately 33% between 2001 and 2025 when adjusted for inflation. During the same period, the cost of maintaining a medical practice has continued to rise.
The result is a healthcare environment where physicians struggle to balance quality care with financial viability. Many practices, particularly independent and community-based practices, face difficult decisions: accept lower reimbursement, consolidate into larger health systems, or reduce the services they offer. Each of these outcomes has consequences for patient access and choice.
Medicare and Medicaid reimbursement policies also influence physician behavior in subtle but important ways. When payment does not adequately reflect the complexity and intensity of care, physicians may be disincentivized from taking on higher-risk patients or providing certain critical services. Physicians may leave independent practice, accelerate consolidation, or reduce services, ultimately limiting patient access to timely and effective care. This is particularly true for specialties such as surgery, anesthesiology, and emergency medicine. A fair, sustainable payment system is essential for the continued health of New York’s healthcare infrastructure.
Although reimbursement policy is largely determined at the federal level, New York physicians and organizations like MSSNY have a critical role in advocacy. MSSNY works closely with the American Medical Association and state legislators to highlight the financial pressures physicians face and to push for solutions that preserve access to care. Policy initiatives include advocating for payment structures that accurately reflect the intensity and complexity of services; encouraging stable, predictable reimbursement to support long-term planning for physician practices; and highlighting the consequences of inadequate payment on patient access and physician retention.
Reforming reimbursement is a complex challenge, but inaction carries serious consequences. The goal is straightforward: ensure that physicians in New York can continue to provide high-quality care without the constant pressure of unsustainable financial constraints. Adequate reimbursement is not simply a matter of physician livelihood, it directly affects the ability of hospitals, clinics, and community practices to maintain critical services for patients across the state.
As President of MSSNY, I remain committed to advocating for these reforms. Our goal is to create a system that compensates physicians fairly, ensures financial viability for practices of all sizes, and ultimately protects patient access to high-quality care. Physicians are the cornerstone of healthcare delivery, and their ability to practice sustainably is central to the health and well-being of our communities.
Join me in advocating for a fair reimbursement system.
All the best,
Mark J. Adams, MD, MBA, FACR
MSSNY President
