Trump Administration Seeks Medicare Payment Overhaul, Targets AMA’s $300 Million CPT Code System
Updated
Updated · The Washington Post · Jul 14
Trump Administration Seeks Medicare Payment Overhaul, Targets AMA’s $300 Million CPT Code System
2 articles · Updated · The Washington Post · Jul 14
Summary
CMS on Tuesday opened a public request for ideas to remake Medicare’s physician payment system and explore alternatives to the AMA-run CPT billing codes that help determine reimbursement.
The push aims to redirect incentives from surgeries and other lucrative procedures toward primary care and prevention, reflecting long-running criticism that the current formula rewards treatment more than disease prevention.
More than $300 million a year in CPT royalties flows to the AMA, whose recommendations on service values are not binding but are overwhelmingly used by federal officials to set doctor pay.
Any rewrite faces fierce lobbying and major technical hurdles, and the administration would still need to navigate a lengthy regulatory process before Medicare payment changes could take effect.
Kennedy and White House aides have discussed the shift for about two years, framing it as a challenge to entrenched medical interests that has drawn support from some public health advocates and lawmakers in both parties.
Can changing billing codes truly shift American healthcare from lucrative procedures to preventive medicine?
As the AMA's billing system faces overhaul, who will now decide what a doctor's work is truly worth?
Medicare Physician Payment Overhaul 2026: Key Reforms, CPT System Controversy, and the Push for Value-Based Care
Overview
As of July 2026, Medicare payments are seeing major changes driven by the Trump administration’s reforms and new CMS initiatives. President Trump’s 'One Big Beautiful Bill Act' adds a 2.5% boost to physician payments, while CMS’s 2026 pay rule brings the first overall increase for doctors after years of cuts. These updates aim to improve seniors’ access to quality, preventive care and recalibrate incentives in the healthcare system. Physicians in advanced alternative payment models will see a 3.77% increase, and others a 3.26% rise, reflecting a strategic shift toward rewarding value and efficiency in care delivery.