MEDICARE “ROBS PETER TO PAY PAUL”

Medicare is really good at using smoke and mirrors to convince doctors they’re getting paid more when they really aren’t. This mammoth Medicare bureaucracy is doing everything it can to spend no more money next year than it does this year. Obsessed with “budget neutrality,” the Centers for Medicare and Medicaid has learned how they can give doctors a raise without it affecting the CMS’s bottom line. It’s called uniquely fuzzy math. 

The ploy for 2026 is they’re giving some docs a raise, but since no good deed goes unpunished, other physicians, particularly surgeons and other procedure-oriented physicians, are being told they face a pay cut that will range from 1% to 7%. Unilaterally, Medicare has decided payments for “procedures, surgery, and medical tests” can be reduced by 2.5%, “contending that physicians have become more efficient at providing these services and no longer need as much time to perform them.” To Medicare, less time means less pay! What a crock!!!

That means reimbursements for radiologists and pathologists would fall by 1%, thoracic surgeons would see a pay decrease of an average of 4%, and neurosurgeons a 5% decrease. What that really means is the doctor who has your heart or brain literally in his hands and performs the riskiest operations of any, is being asked to take huge risks with patients lives in the balance at a rate discounted from last year. His services aren’t worth as much in ‘26 as they were in ‘25, ‘24, or ‘23. Even though he’s doing the same procedure, he has gotten adept at doing it, and it isn’t requiring as much time. So, CMS uses shorter time involvement to justify a decrease in reimbursement for that procedure. Do you think Patrick Mahomes gets a pay cut after being chosen MVP? Another major CROCK!!

So “Peter” gets robbed and the “Paul’s” of the medical profession are the benefactors. Geriatricians, neurologists, NP’s, and PA’s will get a 1% increase.

Optometrists, pediatricians will get a 2% increase.

Clinical psychologists, endocrinologists, family physicians, and GP’s get a 3% increase.

Clinical social workers and rheumatologists get a 4% increase.

Allergists/immunologists get a 7% increase. 

Remember, though, CMS uses smoke and mirrors, and now they appear: All physicians will receive a “2.5% across-the-board payment increase in 2026.” Everyone. So for those taking the largest pay cut, the loss is “tempered” by the general increase. So their hit isn’t as large a percentage, but it’s still a hit. 

In some small way, the AMA has responded to these changes, but their influence has waned over the years. Because of past failures to respond to physician complaints in an energetic and persuasive manner, the AMA has become an impotent meme, and a mere 15% of practicing physicians are members. They have, however, publicly commented that “inflation-adjusted pay for physicians has declined over the past two decades [Has it ever!] and “Physicians are facing rising costs for rent, wages for their staff, medical supplies, and administration.” To their credit, they also said “Between 2001 and 2025, Medicare physician pay remained virtually flat even though the cost of running a medical practice increased 59%….adjusted for inflation in practice costs, Medicare physician pay declined 33% from ‘01 to ‘25.” You cannot run a business with numbers like that. I know, I tried. 

The AMA also totally rejected as bogus the claim that surgeries are taking less time to perform. A study showed that most surgical times “stayed the same or increased from 2019 to 2023…surgeries also became more complex during that time.” So that argument for pay reductions holds no water and is a joke. 

Dr. G’s Opinion: This Medicare payment fiasco has gone on for over 30 years. It will never change for the better. A whole new payment system is one solution, but I don’t know what it would look like. A doctor strike in protest of declining reimbursement would get peoples’ attention, but would destroy what little positive reputation and prestige the medical profession still has. It would be a disaster for patients and would have to exclude life-and-death-level emergencies. These “Rob-Peter-to-pay-Paul” solutions may impress some folks, but those who get increases will barely noticed it, and those taking a cut will be very upset. The physician payment nightmare just gets worse.

Reference: Szabo L. Medicare Proposal Would Boost Primary Care Doc Pay, Offer Surgeons Less. Medscape 2025 October 7.