Urge Your Federal Representatives to Support Medicare Payment Reform

April 16, 2026

The AMA is asking physicians to urge their federal representatives to support the recently introduced Provider Reimbursement Stability Act, H.R. 8163. Physicians can use this link to prepare and send a pre-drafted email directly to their representatives.  

The bill contains three major reforms: 

1. Updated Budget Neutrality Threshold. Currently, budget neutrality dictates that if federal spending increases exceeds $20 million in one area, then that must be offset by other costs in healthcare (e.g., decreases in Medicare payment rates). The $20 million budget neutrality threshold has remained the same since the early 1990s and has never been adjusted for inflation. H.R. 8163 would modernize this outdated provision, providing a long overdue threshold increase to $54.3 million, and indexing it every five years based on the cumulative percentage increase in the Medical Economic Index (MEI).   

2. Regular Evaluation of Medical Practice Costs to Stabilize Payment Rates. Medicare payment rates are partially calculated based on practice costs. Currently, the Centers for Medicare and Medicaid Services (CMS) updates different components of practice costs and/or practice costs associated with specific specialties at different times on irregular cycles. The bill requires CMS to evaluate all medical practice costs at least every five years to prevent large swings in payment rates. 

3. Claims-Based Payment Rate Adjustments. Medicare payment rates are partially calculated based on projected service utilization. Currently, when CMS adds new billing codes or unbundles existing codes, they must estimate the projected utilization of said codes. If CMS over-projects utilization, physicians lose money and those costs can’t be recouped. The bill requires CMS to (a) review actual claims data on the utilization of new or unbundled codes after they have been on the market and (b) increase payment rates in following years to reconcile for over-projections.  

To learn more, click here. Contact Adrian Uphoff, manager of health policy and regulatory affairs, with questions.