Medicare was initially developed to provide health insurance to address the health care needs of Americans aged 65 and older, many of whom lacked adequate insurance coverage and the capacity to keep up with general workforce requirements. Medicare has long been the cornerstone of health care for millions of Americans and, therefore, often sets the benchmark for health care reimbursement.

Currently, approximately 67.7 million people are enrolled in Medicare.¹ The number of elderly adults in the United States continues to increase, resulting in higher utilization of Medicare. Recent reports project that the number of Americans aged 65 and older will increase by about 47 percent by 2050, which would concurrently represent approximately 23 percent of the population.² 

Medicare not only affects the lives of those who utilize it, but also the ability of the health care system to provide care. For context, Medicare and Medicaid accounted for 54.4 percent of emergency department (ED) visits and 55.3 percent of aggregate costs.³ EDs are the safety nets for the health care system and rely heavily on Medicare reimbursements, making them particularly vulnerable to funding reductions.

Recent proposals by Centers for Medicare and Medicaid Services (CMS) to further decrease Medicare reimbursements threaten the financial and operational capacity of emergency medicine. These cuts have far-reaching implications for emergency physicians, including decreased compensation, increased workload, and compromised wellness, and have even broader effects on patients and the stability of the health care system.

Proposed Cuts and Their Implications

CMS has proposed reductions in Medicare reimbursement rates as part of broader cost-containment measures. These cuts will result in a 2.9 percent decrease in reimbursement rates, for the fifth consecutive year, significantly affecting emergency physician income.^4,5 Generally, emergency physicians are compensated through a combination of fee-for-service, relative value unit (RVU)-based models, and, occasionally, salary. Medicare reimbursement predominantly relies on RVUs, which are calculated using an intricate and often convoluted conversion factor system.⁶ These payments continue to decrease because of insufficient inflation adjustments.

Reimbursement for emergency physician services decreased by 29 percent between 2000 and 2020.⁷ Even private insurers set payment rates based on Medicare’s fee structure, further emphasizing the influence of CMS on overall reimbursement.⁵ Emergency physicians also face challenges with uncompensated care because EMTALA, which requires all persons presenting to an ED be medically screened by a qualified medical professional, also mandates treatment regardless of patients’ insurance status.⁸

In addition, emergency medicine compensation has not kept pace with increasing inflation, growing administrative burden, or surging patient volumes.⁹ The 2024 MGMA Provider Compensation and Production Report showed that emergency medicine had the biggest five-year decrease in compensation (inflation-adjusted) among specialties in the United States.¹⁰ Although emergency physicians’ pay continues to decrease, the work burden and burnout rates continue to increase.¹⁰