Why it Matters

A bill to fix a decades-old Medicare payment formula is drawing support from both sides of the aisle and the reason why says something about where healthcare politics stands in 2026. Introduced on March 30, 2026, by Rep. Greg Murphy (R-NC-3) — himself a physician — the Provider Reimbursement Stability Act targets a structural flaw that has quietly eroded Medicare physician payments for decades.

The core problem: a budget neutrality rule embedded in the Medicare Physician Fee Schedule requires the Centers for Medicare and Medicaid Services to reduce the "conversion factor" — the dollar multiplier applied to all physician services — whenever projected spending increases exceed a set threshold. That threshold is $20 million. It has not been updated since the fee schedule was created in 1992.

In a program the size of Medicare, $20 million is a rounding error. The result is that nearly any coding update or policy adjustment triggers automatic, across-the-board pay cuts to physicians — cuts that are permanent even when the original spending projections turn out to be wrong.

H.R. 8163 would address this through three changes:

  • Raising the budget neutrality threshold from $20 million to $54.3 million, indexed to the Medicare Economic Index every five years.
  • Capping year-to-year conversion factor changes at no more than plus or minus 2.5 percent, preventing sudden large swings in what physicians are paid.
  • Updating practice expense calculations, which factor into reimbursement for overhead costs that have also gone largely unrevised for years.

The Backstory

This is not a new fight. The Medicare physician payment system has been structurally unstable for the better part of thirty years.

The original formula, the Sustainable Growth Rate, consistently produced threatened cuts that Congress patched annually for nearly two decades in a cycle that became known as the "doc fix." Congress finally repealed it in 2015 through the Medicare Access and CHIP Reauthorization Act — but the replacement froze annual conversion factor updates at zero percent from 2020 through 2025, even as inflation climbed sharply.

Meanwhile, the budget neutrality rule kept producing cuts. The American Medical Association has documented consecutive reductions of 1.60 percent in 2023 and 2.18 percent in 2024, followed by a 2.83 percent cut implemented for 2025. The AMA estimates the budget neutrality mechanism reduced Medicare physician payments by more than $5.2 billion between 2013 and 2021 — largely due to overestimation of a single category of services.

The CMS Calendar Year 2026 Medicare Physician Fee Schedule Final Rule, issued in October 2025, underscored that the underlying structural issues remain unresolved.

Why Democrats Signed On

In the 119th Congress, bipartisan cooperation on healthcare policy is not a given. This makes the cross-aisle support for this medical reimbursement reform bill worth examining.

Rep. Tom Suozzi (D-NY) joined as a lead cosponsor — a signal that the bill's appeal crosses ideological lines. When Medicare reimbursement rates fall, physicians face a choice: absorb the losses, limit the number of Medicare patients they see, or leave the program entirely. That dynamic plays out in every congressional district — urban, suburban, and rural. The patient access problem it creates does not sort itself by party registration.

The bill is also framed as structural modernization rather than new spending — a distinction that matters in the current fiscal environment. As Rep. Murphy stated in his press release: "The current budget neutrality framework within the Medicare physician fee schedule can create uncertainty and unintended pay cuts based on outdated policies or faulty assumptions. We have to modernize outdated rules that hurt our doctors, and this bipartisan bill does just that."

The frame of fixing a broken mechanism rather than writing a check gives members on both sides political cover to support it.

Broad Backing

The bill has drawn endorsements from the American Medical Association and the Medical Group Management Association, as well as the American Podiatric Medical Association. These organizations represent physicians and practice administrators across specialties and regions — and their advocacy reach spans both parties.

The Ripon Advance has reported that the bill is also framed around protecting private practice physicians — a concern shared by members of both parties who have expressed worry about hospital consolidation and the erosion of independent, community-based care.

Where the Bill Goes Next

The bill was referred to the House Committees on Energy and Commerce and Ways and Means on the day of its introduction and has not yet advanced out of committee. The White House typically issues formal positions later in the legislative process, when a bill is approaching a floor vote. It has not commented as of publication.

Whether it gains the momentum needed to move through committee — and whether the administration ultimately weighs in — remains to be seen. But in a Congress where bipartisan healthcare policy agreement is rare, the fact that this 119th Congress healthcare bill has attracted support from both sides of the aisle at all is itself notable.

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