The recent decision by the Centers for Medicare and Medicaid Services (CMS) to reduce physician payments by 2.9% in 2025 has sparked criticism from medical associations and industry stakeholders.
Concerns about the financial viability of medical practices were already raised when a draft rule was released in July. The finalized Medicare Physician Fee Schedule rule not only sets payment rates but also introduces new policies to improve primary care, maintain telehealth flexibilities, and strengthen the Medicare Shared Savings Program (MSSP).
Health and Human Services Secretary Xavier Becerra emphasized the administration's commitment to improving healthcare access, particularly for underserved communities. The payment cuts have raised concerns about the sustainability of medical practices, especially in rural areas where access to care is already limited.
The reduction in the Medicare conversion factor, which determines payment amounts, has alarmed healthcare providers. The American Medical Association (AMA) has pointed out that Medicare reimbursement has decreased by 29% since 2001 when adjusted for inflation. The Medical Group Management Association (MGMA) has expressed concern about the financial viability of physician practices and the potential impact on patient access to care.
The AMA and MGMA have called for legislative action to prevent further erosion of practice viability. The American Academy of Family Physicians (AAFP) has highlighted the need for systematic reform to the Medicare payment structure to preserve payment levels. The Medicare Patient Access and Practice Stabilization Act aims to block the planned cuts and provide an inflationary update to physician pay. However, critics argue that a more comprehensive solution is needed.
The finalized rule preserves telehealth flexibilities and introduces new coding and payment policies for advanced primary care management services. These changes aim to enhance support for primary care teams and establish a more accountable care framework within the Medicare system. The Primary Care Collaborative and AAFP have praised these developments.
The ongoing debate over Medicare payment reform remains a critical issue for physicians, patients, and lawmakers, given the financial pressures faced by medical practices and the need for sustainable solutions.