Medicare Advantage payments expected to rise in 2026, and doctors are dismayed

Physicians and health systems expressed their disappointment when Congress and the Biden administration didn’t address cuts in Medicare payments in the spending package approved just before the holidays.

Bruce Scott, MD, president of the American Medical Association, criticized plans to boost federal payments to Medicare Advantage plans, even as doctors are getting cuts in their payments from Medicare.

Now, physicians are seeing their frustration compounded by the fact that the Centers for Medicare & Medicaid Services have announced plans for a payment boost for Medicare Advantage plans.

CMS says Medicare Advantage plans are likely to see payments rise by 4.3% from 2025 to 2026, or an increase of $21 billion.

Already angered by cuts to physician payments, the American Medical Association assailed the plans for bigger Medicare payments to insurers. Physicians are slated to see a 2.8% cut in Medicare payments in 2025, and doctors have had cuts in payments repeatedly in recent years.

Bruce A. Scott, MD, president of the American Medical Association, criticized CMS for the contrasting payment plans.

“So, while MA plans receive an increase beyond the expected health care inflation rate, Congress not only failed to provide a physician payment update but allowed a new round of cuts at the end of the lame duck,” Scott said in a statement Monday.

“It's unbelievable they're giving insurance companies that had record profits an increase while at the same time cutting payment to physician practices that are struggling to survive,” he added.

Doctors seethed when CMS finalized a 2.8% cut in payments to physicians for 2025. Physicians, hospitals and medical groups all implored the administration to reconsider the cuts, and they urged lawmakers to take action to block the reductions. They said the cuts could spur more doctors to stop accepting Medicare patients, making it harder for people to get the care they need.

When Congress approved a short-term spending plan to avoid a government shutdown just before Christmas, the package kept the Medicare cuts in physician payments in place. An earlier version of the spending package would have included a smaller (0.3%) cut in physician payments, which doctors didn’t love but would’ve been better than the final package.

Doctors have urged Congress to revamp the way Medicare pays physicians to reflect their rising costs, a theme Scott hammered again in light of the planned uptick in Medicare Advantage payments.

“This contrast highlights the urgent need for Congress to prioritize linking payment to physician practices to the cost of providing care,” Scott said in his statement. “Otherwise, with or without MA plans, patient access will suffer if physicians close their practices. A new Congress is meeting — it’s time for a new approach to physician payment reform.”

Medicare Advantage plans have grown increasingly popular with consumers, as more than half of all Medicare recipients participate in such plans. But health systems have blasted insurers for rising denials of approval for treatments in Medicare Advantage plans.

The new session of Congress will have to get busy on a new federal spending plan. The short-term package only funds the government until mid-March.

Healthcare leaders and trade groups are pushing Congress for a longer extension of telehealth and hospital-at-home programs. The stopgap spending package only extended telehealth program approvals through the end of March.

ATA Action, the American Telemedicine Association’s advocacy arm, sent a letter to congressional leaders Monday urging lawmakers to approve lasting telehealth reforms.

• Read more: Congressional spending plan: What’s in it for healthcare, and what isn’t