Medicare will cut its base pay rate for doctors about 2% in 2027, deeper than proposed

Medicare will lower the base rate it pays doctors by about 2% next year under a rule issued Wednesday, a deeper cut than federal officials proposed this summer.

Alaskans on Medicare have had trouble finding doctors. "It's a challenge to find a doctor to take Medicare statewide," a member of the Alaska Commission on Aging said at the commission's September 2023 meeting, according to its minutes. A federal Medicare official told the commission that providers in Alaska complain "the Medicare rates are too low."

The cut comes mostly because a one-year, 2.5% raise Congress approved for 2026 runs out Jan. 1. Smaller increases already set in federal law make up only part of it.

Medical groups are asking Congress to stop the cut. The cuts "further degrade an already fragile payment system and amplify severe financial challenges caused by years of inadequate Medicare reimbursement," Anders Gilberg of the Medical Group Management Association said Nov. 5. His group and the American Academy of Neurology have taken that request to Congress.

The Centers for Medicare & Medicaid Services set the base rate in its final rule. For most clinicians, the base rate falls 2.31%, to $32.63 from $33.40. The agency had proposed $32.84 in July. Clinicians in certain alternative payment models get a slightly smaller cut, 1.83%.

Medicare multiplies that base rate by a value assigned to each service, so what a doctor is paid for a given visit or procedure can also shift with other changes in the rule.

The doctor pay rule is separate from Medicare's hospital outpatient rule, which will pay Alaska hospitals more for outpatient care next year to cover higher supply costs.