LUGPA Policy Update:
Medicare Physician Payment Reform, MACRA, and MIPS Hearing
(May 20, 2026)

May 2026

At-a-Glance

What Happened:
The House Energy & Commerce Health Subcommittee held a hearing examining the Medicare Physician Fee Schedule (MPFS), MACRA, MIPS, and opportunities for broader payment reform.

Why It Matters:
Members from both parties and expert witnesses expressed concern that declining physician reimbursement, rising practice costs, and burdensome reporting requirements are undermining independent practices and accelerating consolidation into hospital systems.

Key Policy Signals:

• Growing bipartisan support for tying physician payment updates to the Medicare Economic Index (MEI)
• Significant criticism of MIPS and interest in alternative approaches
• Continued momentum for site-neutral payment reforms
• Support for strengthening and simplifying Alternative Payment Models (APMs)

Key Themes from the Hearing

Physician Payment and Practice Viability

Witnesses repeatedly highlighted the gap between physician payment updates and inflation. Members noted that physician reimbursement has declined substantially in real terms over the past two decades while practice expenses, including staffing, technology, and compliance costs, have continued to rise. Several lawmakers linked these financial pressures to ongoing consolidation and the decline of independent physician practices.

Site-Neutral Payment Reform

Members from both parties raised concerns about payment disparities between physician offices and hospital outpatient departments. Witnesses argued that Medicare often pays significantly more for the same service when delivered in a hospital setting, creating incentives for consolidation and increasing costs for patients and taxpayers. Site-neutral reforms were widely discussed as a potential solution.

MACRA and MIPS Reform

There was a broad consensus that MIPS has not achieved its intended goals. Witnesses described the program as administratively burdensome, costly to comply with, and often disconnected from meaningful quality improvement. Several members expressed interest in replacing MIPS with more streamlined, specialty-focused, and clinically relevant performance frameworks.

Alternative Payment Models

The hearing also focused on expanding participation in APMs. Witnesses cited the potential of value-based care models to improve quality and reduce costs but noted that current program requirements, benchmarking methodologies, and incentive structures can discourage participation. Policymakers discussed ways to simplify APM participation and create more predictable incentives.

Inflation-Based Payment Updates

One of the strongest bipartisan themes was support for establishing a more stable physician payment system that accounts for inflation. Multiple lawmakers and witnesses endorsed linking annual physician payment updates to the Medicare Economic Index, arguing that predictable updates are necessary to preserve patient access and maintain practice stability.

Policy Proposals Discussed

• Linking annual physician payment updates to the Medicare Economic Index (MEI)
• Replacing or substantially reforming MIPS
• Strengthening incentives and participation pathways for APMs
• Advancing site-neutral payment reforms
• Improving payment for chronic care management and longitudinal patient care

LUGPA Takeaways

The hearing reinforced several longstanding LUGPA advocacy priorities. Members of Congress and witnesses broadly acknowledged that the current Medicare physician payment system is not keeping pace with inflation or practice costs, placing increasing pressure on independent practices. There was also growing recognition that MIPS imposes significant administrative burdens while providing limited value and that payment disparities between physician offices and hospital outpatient departments continue to drive consolidation.

Importantly, bipartisan interest in MEI-based payment updates, MACRA reform, and site-neutral payment policies suggests that momentum for physician payment reform continues to build. The hearing further highlighted the value of independent physician practices in delivering high-quality, cost-effective care in community settings.

LUGPA Position

LUGPA supports reforms that provide predictable, inflation-adjusted physician payment updates, reduce unnecessary administrative burden, promote site-neutral payment policies, and expand meaningful opportunities for specialty physicians to participate in value-based care models. We will continue to engage with Congress and federal policymakers to ensure that future reforms support independent specialty practices and preserve patient access to community-based care.